Brazil’s Costly Mining Failures Tied to Cheap Waste Storage – by Laura Millan Lombrana (Bloomberg News – January 31, 2019)

The deadly collapse of a Vale SA tailings dam in Brazil is serving as a wake-up call for an industry that regularly cuts costs by storing mining waste in the cheapest possible way.

The slurry of ground rock and effluents left over after companies extract marketable minerals from the ground has been stored for decades in massive ponds held back by embankments or dams. Their safety, though, depends very much on the design of the ponds, and on the cost of building them.

The Vale SA dam that collapsed in Brazil last week, and a previous dam that failed there three years earlier, were both built on the go using the “upstream” method, typically the cheapest by far. Under that technique, the wall containing the pond is primarily constructed of tailings, and it’s designed to grow as more effluents are pumped in. A costlier method pre-builds the walls and insulates them.

“There are a lot of calculations people can use for the cost of a failure,” said Dirk van Zyl, a professor of mining engineering at the University of British Columbia. “You not only have the real cash cost to the company, but you also open the whole discussion of what a human life is worth?”

This week, the mining sector is coming face-to-face with the math. On top of the 99 dead and the 259 missing, Vale, the world’s largest iron ore producer, could face damages as high as $7 billion for the current disaster, according to Bloomberg Intelligence.

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