Large Miners Agree on Dam Standards After Deadly Burst
August 05 2020 - 10:36AM
Dow Jones News
By Alistair MacDonald
The world's largest miners have published global standards for
building and managing mine-waste dams, including guidelines aimed
at making the safety auditing of the giant structures more
independent.
The International Council on Mining & Metals, an industry
body of over two dozen of the world's biggest miners, hired experts
to draft the new guidelines in the wake of a 2019 mine-waste dam
failure near Brumadinho, Brazil, which killed 270 people.
Authorities there have, in part, blamed a conflict of interest
between the dam owner, Vale SA, and an outside auditor, for masking
structural faults that led to the collapse of the dam.
The new guidelines, released Wednesday, seek to address
potential conflicts of interest, saying, for instance, that
independent auditors and review boards hired to check the
structures' safety shouldn't also have worked on the dams' design,
construction or operation. The guidelines also say mining companies
should have a specific mine-waste expert reporting directly to the
firm's chief executive, rather than to site managers, and urged
formal whistleblowing channels. The new recommended practices also
offer guidelines on more technical aspects of the management of
mine waste, called tailings.
Miners and a group of large investors hailed the new rules as a
step change that brings together best practices from around the
world and increases public disclosure.
The guidelines aren't binding, however, and stop short of
recommending banning the type of dam that failed in Brazil. That
structure, called an upstream dam, is typically cheaper to build,
but critics say it is more unstable.
"This will bring a lot more standardization in the way we manage
one component of our industry, which, if neglected, can deliver big
disasters," said Mark Bristow, Chief Executive of Barrick Gold
Corp., a member of the ICMM. Mr. Bristow said the ICMM's 27 members
have agreed to follow the guidelines, while encouraging other
miners to do so.
Experts hired by the Brumadinho dam's owner, Vale, concluded
last December that the dam's original design and the way it was
expanded over the years had allowed water to build up to such
levels that it was only a matter of time before it gave way.
The Wall Street Journal first reported close ties between Vale
and TÜV SÜD, the outside auditor. A Journal investigation found
Vale and its inspectors were aware of dangerous conditions at the
mine-waste dam months before it collapsed but that inspectors,
worried about losing Vale contracts, certified the dam as safe.
Last January, Brazilian prosecutors charged Vale's former chief
executive Fabio Schvartsman and 10 other company officials with
homicide and leveled the same charge against five people at
Germany's TÜV SÜD.
Vale said it would implement the new standards, much of which it
said it had already adopted. The company has in the past denied
that there were conflicts of interest and denied that it knew that
the dam was dangerous.
A spokesman for TÜV SÜD denied that there was a conflict of
interest and said there was no regulation in Brazil that banned
companies from doing safety auditing and consulting on the same
dam. The spokesman said the company's safety audit was issued along
the relevant Brazilian safety standard.
Write to Alistair MacDonald at alistair.macdonald@wsj.com
(END) Dow Jones Newswires
August 05, 2020 10:21 ET (14:21 GMT)
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