New tailings standards place considerable onus on mining companies to ensure adequate financial provisioning for the closure of their Tailings Storage Facilities (TSFs) – notably for future costs that these TSFs will incur after closure or may incur in the case of failure.
The Global Industry Standard for Tailings Management (GISTM) points to the need for TSF owners to regularly – and publicly – update their planned cost of closure and reclamation. Should the owner consider selling the mine, they also need to consider any prospective purchaser’s ability to maintain the GISTM standard in this regard.
James Dutchman, Associate Partner and Principal Engineering Geologist at SRK Consulting South Africa (SA), said that mining companies can begin proactively addressing their financial provision at an early stage, by optimising the TSF design to meet closure requirements as effectively and economically as possible.
Multidisciplinary guidance
“This means integrating the input of various professional disciplines to ensure that structural and infrastructure risk are considered alongside the TSF’s environmental and social impact”, said Dutchman. “In many cases, there is a trade-off between investing more upfront for an optimal design that will require less operating expenditure in future, or moderating capital expenditure in the knowledge that more will be required to provision for the future”.
The detailed and regularly updated knowledge base that is highlighted as a requirement by the GISTM remains a vital basis of provisioning for the future. This becomes particularly clear when considering the risk of TSF failure and the cost of emergency response and long-term recovery from catastrophic failure – covered in principle 13 and 14 of the GISTM. According to SRK Consulting SA Principal Consultant Lisl Pullinger, this highlights the need for extensive social and environmental data relating to the TSF’s inundation zone.
Understanding impacts of failure
“Data on the people, livelihoods, private structures and public infrastructure in the inundation zone, for instance, will be an important pillar for understanding the potential costs of recovering from a failure event”, said Pullinger. “Similarly, a detailed environmental baseline will also be required to guide the costing of rehabilitation of the natural landscape after a failure”.
Specialised skills in various disciplines are required to then quantify the likely replacement costs of damage to property – which would of course vary from country to country – whether this relates to homes and churches or agricultural lands and other environmental assets. She said that this would guide the development of a financial model that would allow mining companies to progress toward a financial quantum.
“To strengthen the integrity of the financial model and the financial provisioning that follows, companies will usually require that an independent agency is involved, who does not have a stake in the outcome of resulting decisions”, she said.
