By Alistair MacDonald and Kim Mackrael
Less than half of the world's larger miners have released safety
and environmental details about their mine-waste dams, showing the
mixed success of investors' demands for greater transparency after
the deadly Brumadinho dam collapse in Brazil.
In January, 270 people died following the collapse of a tailings
dam owned by Brazil's Vale SA. The incident prompted a coalition of
investors who manage more than $13 trillion to ask 726 companies in
the mining and oil-sands business to disclose information on their
dams.
Nearly 55% of companies hadn't delivered as of last month, the
Church of England said. While some of the largest miners--including
Vale, BHP Ltd. and Anglo American PLC--have disclosed their
information, others have yet to do so.
Investors are increasingly examining ethical issues when looking
at mining.
"Not disclosing is unacceptable and poses a very real risk to
our investment," said John Howchin, who analyzes ethical issues for
Sweden's state pension funds, which led the group demanding more
transparency alongside the Church of England Pensions Board.
Tailings risk has become another turn-off for an investment
community that has largely shunned the mining sector since the
collapse of the commodity bubble in 2011.
Tailings, the waste material from extracting valuable minerals,
are often held for decades behind dams that can be risky if they
are poorly constructed, ill-maintained or filled with too much
waste. Major failures of tailings dams have become more frequent as
mining companies ramp up production to meet the world's growing
demand for commodities.
The large number of funds involved in the survey--coupled with
the lack of comprehensive, state-compiled databases on
tailings--has drawn attention to the coalition's effort and
investors' increasing engagement on environmental issues.
Norilsk Nickel, one of world's most valuable miners with a
market capitalization of roughly $43 billion, hasn't publicly
released details on its tailings dams. In 2016, heavy rainfall
caused a Norilsk Nickel tailings dam in northern Russia to
overflow, coloring a local river red.
A spokeswoman for the Moscow-based company said it hadn't
received a request from the coalition but would be happy to
cooperate. The Church of England said it emailed requests to the
chief executives and investor relations departments at the 726
companies. If the email to investor relations bounced back, it
would go to the CEO and staff in sustainability or engineering
departments.
Miners of potash and phosphate--minerals used mainly in
fertilizers--have been slow to disclose. Canada-based Nutrien Ltd.,
a major producer valued at around $27 billion, sent basic
information on its mine-waste facilities but didn't answer key
questions such as whether the dams have had stability issues.
Nutrien said late last month that it had added resources that
would allow it complete the survey. A company spokesman initially
said some questions were left unanswered because the main byproduct
of potash mining is salt, viewed as less dangerous in a spill, and
because Nutrien's mines in Saskatchewan aren't close to major water
bodies or populated areas.
Satellite images show two of the company's six Saskatchewan
mines are located a few miles from residential communities and one
neighbors a bird-breeding area. A tailings pond at the company's
North Carolina phosphate mine is located next to the Pamlico River,
which feeds into the state's largest estuary.
At least two tailings facilities owned by Nutrien have leaked or
failed in the past, public records show. That includes a potash
mine near Vanscoy, Saskatchewan, that reported a failure at its
tailings pile in a 2014 technical report. Also that year, the
company, then called Potash Corp. of Saskatchewan, revealed to a
local broadcaster that it had discovered tears in a liner meant to
contain salt water tailings at a site in New Brunswick, Canada.
The Nutrien spokesman said the company has never had a dam
failure result in a release of salt water beyond its tailings
management areas. He said any seepage of brine from the New
Brunswick tailings pond would have been small and captured by the
site's remedial systems
Israel Chemicals Ltd. is among other potash and phosphate miners
that haven't responded to the investor group's survey. A spokesman
said the original request for tailings data hadn't reached the
relevant people at the organization.
"Now that you have brought this issue to our knowledge, the
company has forwarded it to the relevant person who will take care
of it immediately, " the spokesman said.
In 2017, Israel Chemicals reported that the partial collapse of
a subsidiary's dike in Israel released 100,000 cubic meters of
acidic wastewater that flowed into a nearby nature reserve. The
wastewater resulted from the production of phosphate
fertilizer.
The spokesman said the company worked to clean up the wastewater
spill and is developing stronger and more-stable storage facilities
for its phosphate fertilizer tailings.
A number of smaller Western-based miners also haven't disclosed
information on their tailings dams.
Vancouver-based Imperial Metals Corp. is not on record--even
though it is tied to what is considered one of Canada's worst
environmental catastrophes. In 2014, a British Columbia dam owned
by the company burst, sending some 25 million cubic meters of
mining waste pouring into a pair of glacial lakes
A representative for Imperial Metals said the company's CEO had
received the request but declined further comment.
Large Chinese miners such as Jiangxi Copper Co., Zijin Mining
Group Co. and Zhongjin Gold Corp. also haven't shared information
with the investor coalition. None of the three replied to emails
seeking comment.
In China, there are 8,869 documented tailings dams, of which 16%
are within about half a mile of a residential area, school or
hospital, according to research led by the School of University of
Science and Technology in Beijing.
Karen Hudson-Edwards, a mining specialist at Britain's
University of Exeter, said the actual number in China is estimated
at around 12,000 dams and there is little transparency on tailings
risk in the country.
There have been at least 12 serious tailings-dam accidents in
China since the 1960s, with one in 2008 killing 277 people,
according to the World Information Service on Energy, a
Netherlands-based nonprofit.
Write to Alistair MacDonald at alistair.macdonald@wsj.com and
Kim Mackrael at kim.mackrael@wsj.com
(END) Dow Jones Newswires
December 18, 2019 05:45 ET (10:45 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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