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"This columnist by no means advocates State control of mining. (The record of Coal India on the environmental and human rights fronts is dismal.) Nor do I ask for a complete ban on mining, whether for the home market or for export. What I do urge is a cold, hard look at the grievous damage that unregulated and illegal mining has caused. For, while the global commodities boom may have gone temporarily bust, the assault of mining on India's peoples, environment, and democracy continues."
The Samarco disaster was waiting to happen The most disconcerting aspect of the findings of the investigation into the Samarco tailings dam disaster is that, almost from the time it was constructed, the dam was a calamity in waiting. The independent panel BHP Billiton and Vale commissioned to investigate the causes of the dam’s failure, which resulted in 19 deaths, an environmental disaster and massive costs to BHP and Vale shareholders, released its full report overnight, complete with a detailed animation of how the collapse occurred. The starting point for a series of “incidents” that ultimately resulted in the collapse occurred during its erection in 2009, when construction defects meant the dam was so badly managed that the original design concept couldn’t be implemented. Critical to the design was the separation of the two types of material the dam was built to hold: sands, which were free-draining, and slimes, which are a clay-like material with low permeability. Sands, when not drained properly, become loose and can become liquefied and flow like a fluid. The 2009 issues led to a revised design which allowed more saturation of the sands and increased the potential for their liquefaction. In 2011 and 2012, while the new design was being constructed, water came close to the crest of the dam and allowed slimes to settle in areas it was never intended they would reach. Changes to the aligns of the dam in late 2012 after a concrete conduit was found to be structurally deficient placed an embankment directly over those slimes, creating the preconditions for liquefaction of the sands to occur. By 2013, seepages were occurring, the saturated mass of sands was growing and, in August 2014, minor earthquakes produced horizontal movements in the slimes that affected the sands above them and probably accelerated a failure process that the panel said was already well-advanced. It was at that point that observable cracks occurred and seepage was observed. The dam was reinforced and extra monitoring equipment installed, but just over a year later the dam collapsed. That’s an abbreviated summary of the key moments that led to the collapse but it highlights the fact that there was a sequence of events and ill-fated decisions over a period of years that contributed to the eventual disaster. The investigation wasn’t about apportioning blame but enabling an understanding of how the failure occurred. BHP insisted that the report and the accompanying material be released publicly and in full so that the learnings from the investigation could be shared across the industry. It should be noted that neither BHP nor Vale were the operators of Samarco, which they jointly owned but which was structured as an independent company with its own board and management. The construction of the tailings dam did involve consultation with external industry experts and their continuing oversight, so there are unanswered questions as to how the succession of observable incidents didn’t trigger alarm bells at some point ahead of the failure instead of the layering of faults that occurred and which almost predestined the dam to collapse, with devastating consequences. BHP — and its peers — responded to the tragedy at Samarco by conducting an urgent review of its other major dams and those within joint ventures where, like Samarco, it isn’t the operator. It has developed a new set of global best-practice standards for its dams and has decided to develop a centralised in-house unit to create internal specialised expertise on dam design, construction and management. It is also looking at technology options for improving its dam management and is sharing all its findings and views with the International Council on Mining and Metals. The commitment to making public, and sharing, the findings of the independent investigation and its own responses in all their detail is significant, given the litigation BHP and Vale are facing in Brazil. The prevalence of tailings dams around the world means the report will be pored over by other resource companies and external experts to see whether it has uncovered issues relevant elsewhere. BHP has created a provision of more than $US1 billion against its liabilities for the Samarco disaster, having previously written off its $US525 million of equity in the joint venture with the $US1.2bn of Samarco-related losses it reported in the December-half of the last financial year in the immediate aftermath of the collapse. The original hope was that Samarco, which produced about 30 Mtpa of iron ore before the dam collapsed, would be able to self-fund the remediation and compensation programs BHP and Vale had negotiated with the Brazilian authorities in March (before Brazil’s independent federal prosecutors launched a $US58bn civil claim). It now looks unlikely that the mine will be operating before at least the middle of next year, forcing Samarco to start negotiations with creditors holding about $US3.8bn of bank debt and bonds about the restructuring of their exposures, which are non-recourse to BHP and Vale. Re-starting production at the mine is important, not just for the funding of the remediation and compensation programs (and to service creditors) but because there are about 6,000 employees and contractor whose livelihoods hinge on it coming back into production.
The most disconcerting aspect of the findings of the investigation into the Samarco tailings dam disaster is that, almost from the time it was constructed, the dam was a calamity in waiting.
The US government has paid a bounty of more than $3.5 million to a former BHP Billiton employee who helped expose alleged bribery by the Australian mining giant.