Mine Disasters Seen Showing Cost of Cheap Waste Solutions – by Danielle Bochove (Bloomberg News – November 18, 2015)

http://www.bloomberg.com/

As miners globally review the way they store waste in the wake of another horrific dam spill, the solution may be as simple as it is dramatic: spend a lot more.

Images of sludge spewing into towns and rivers could be a thing of the past if mines used different types of storage such as removing water or building on more stable ground. While that can be as much as 10 times costlier for companies already squeezed by slumping prices, the cost is much higher when things go wrong.

The cleanup bill for the Nov. 5 spill at the Samarco iron-ore venture in Brazil, owned by BHP Billiton Ltd. and Vale SA, probably will exceed $1 billion, Deutsche Bank AG said. Then there’s lost output and potential lawsuits.

“A failure is a lot more expensive than doing it right,” said Dirk van Zyl, professor of mining engineering at the University of British Columbia and one of three experts on a panel into a dam spill in Canada last year.

Samarco says its dams were deemed safe in a July inspection and that it’s too early to determine reasons for the spill. On Monday, BHP Chief Executive Officer Andrew Mackenzie said the company is “carrying out a thorough review of all of our dam facilities of scale.” On the same day, Vale said it’s open to improvements, even after concluding that its other installations, which use state-of-the-art safety practices, were fully compliant.

The Samarco breach, which propelled about 13 billion gallons of mud into communities below, comes a year after Imperial Metals Corp.’s Mount Polley mine in Canada also dumped billions of gallons into lakes and rivers.

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