For the metal mining industry around the world, typically producing grades of less than five per cent, it is the management of waste rock and tailings (sand- and silt-sized particles of rock from around the grains of valuable mineral) that has the greatest potential impact on the environment.
And so it is the greatest point of concern for the public at large.
The public is not concerned about commodity prices, mine productivity or even safety issues in mines, but it is concerned about our impact on the environment.
The only measure of success that counts is environmental performance, and we are failing.
In Canada, we can be proud of the fact that it was largely our consultants and their mining company clients that were responsible for developing the guidelines used to manage tailings management facilities (TMFs) around the world.
The banks that finance large mining projects require compliance with the Equator Principles, and these include the responsible operation of tailings management facilities.
There was a time when major mining companies could make the case that these issues were being adequately addressed by this framework of government regulation and operational practice. Times have changed.
Obtaining a government permit to conduct mining operations, including the TMF, is no longer sufficient to gain ‘social licence to operate’ from local communities.
In communities that have long been engaged in mining activity, or other kinds of industrial processes, compliance with regulatory requirements are often sufficient because social democratic processes ensure regulations largely address societal concerns.
For mines seeking to open in remote areas with non-industrial neighbours, either rural farmers or Aboriginal communities, control by government regulation is suspect.
In South America and Africa, major mining corporations have for many years spent millions of dollars to conduct the technical work necessary to meet government regulations and also to meet the social infrastructure needs of local communities.
It is established practice that companies ensure that schools, medical facilities, and community centres are built in accordance with local wishes, and that they encourage governments to fulfill their responsibilities to provide teachers, medical staff and social workers.
This is achieved by direct negotiation between the company and the communities (often helped by experienced consultants) and it is seldom based on any legal claim the community might have on the land. It is the company simply ensuring the needs of the local community are being met and so achieving ‘social licence to operate’ — a harmonious relationship with their neighbours.
The successful operation of a tailings facility has two essential components: ensure no breach of the tailings dam and ensure the treatment plant extracts contaminants in the water leaching from the tailings pond so as to meet regulated limits for contaminant levels.
This is not simply an issue for communities living close to mines. Of course, the consequences of failure for these communities and the ecologies upon which they depend can be devastating, and the cleanup costs hundreds of millions of dollars.
But for investors, the cost of failure can be devastating. Witness the share-price loss of BHP-Billiton and Vale, owners of the dam that recently failed in Brazil, or the impact on Boliden in 1998 after the Los Frailes failure in Spain.
In Canada, there are thousands of tailings facilities abandoned by mining companies that went bankrupt many years ago, some of them so close to First Nations communities that they affect the health of the community.
Responsibility for cleaning up these sites now falls to the two senior levels of government.
But progress on eliminating them is painfully slow and government departments are woefully understaffed and struggle to consider innovations that might help.
The biggest impact of tailings dam failures is on the credibility of the industry.
Dam failures are seldom a design problem. They are usually operational failures — human failures.
Since there is more than one dam failure every year somewhere in the world, it appears the current design approach cannot assure operational reliability.
The crucial factor is the storage of water behind the dam. Without this, the risk and impact of a dam failure is dramatically reduced.
A change will increase operating cost but will prevent major failures and preserve industry credibility.
Credibility is one of the most critical factors in gaining social licence to operate.
Remote, non-industrial communities are not asking mining companies if they will comply with regulations, they are asking if they can be trusted to fulfill their commitments.
This is not a company issue. Assuring environmental performance is an issue for the mining industry as a whole. Solutions are achievable if companies collaborate. The future of mining depends on it.