"It is a disaster prompted by economic activity, but of a magnitude equivalent to those disasters created by forces of nature."

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These were the words of Brazil’s Environment Minister Izabella Teixeira at the end of November 2015, several weeks after the collapse of the Fundão tailings dam at the Germano open-pit iron ore mine in the subdistrict of Bento Rodrigues, which released an estimated 60 million cubic metres of toxic mudflows into the valley below, killing at least 17 people and causing what has been described as the worst environmental disaster in Brazil’s history.

Agencies of the Brazilian government and the affected state of Minas Gerais are now counting the cost of the Fundão tailings dam failure on 5 November – a federal court ruling has placed the financial cost of the disaster, which contaminated a 650km stretch of the Doce River and a significant expanse of the country’s Atlantic coast, at around $5.2bn. The dam’s operator Samarco, a joint venture (JV) between mining giants Vale and BHP Billiton, is being investigated along with its JV parent companies for its role in the tragedy, while Vale and BHP’s assets in the country have been frozen by the courts to help cover the cost of damages to the victims of the disaster.

Counting the cost of Samarco’s tailings dam failure

For Lindsay Newland Bowker, an environmental risk manager who runs fledgling non-profit Bowker Associates Science & Research In The Public Interest, the costs of such disasters are far more than simply financial. In the case of the Fundão dam failure, the level of environmental damage caused is virtually incalculable, and the incident led to the suspension of water supply to several nearby cities.

"When you get to this scale, as manifest at Mount Polley [2014 tailings disaster in British Columbia, Canada] and Samarco, you can’t really talk about the damages in terms of cleanup costs because you’ve reached a level of damage that is non-remediable, and non-recoverable," says Bowker. "You can’t really put a price on losing an entire river for a generation. So it’s a very different scale of loss."

"You can’t really put a price on losing an entire river for a generation."

While the Samarco disaster might be extraordinary in the sheer volume of tailings released – even conservative estimates of the incident’s scale confirm its place as by far the worst tailings storage facility (TSF) failure in recorded history – it cannot be described as an isolated event. Rather, it must be seen as the latest and most serious manifestation of a mine waste storage issue that appears to have gotten worse, not better, over time, and calls into question the sustainability of the most fundamental aspects of modern mining economics.

A worrying trend of serious TSF failures

A July 2015 study authored by Bowker and Dr. David M. Chambers of the Center for Science in Public Participation found that the occurrence of TSF failures that are deemed ‘serious’ or ‘very serious’ (‘very serious’ being catastrophic failures that involve the release of more than a million cubic metres of tailings) has increased since 1990.

Of the 52 TSF failures cited by the study between 1990 and 2010, 63% fell into the serious or very serious categories. Applying actuarial science to the available data, the report projects a further 11 very serious failures between 2010 and 2020, and an estimated total unfundable public cost of $6bn points to the enormous public liability that potentially lies ahead.

"Right now there’s no spread between the prediction based on my actuarial method and the prediction based on the established 100-year trend line," Bowker says. "That’s what makes that 11 [very serious failures] pretty certain and we’re right on that track now; in fact we’re on track for more, I think."

But what’s behind this worrying trend of increasingly devastating TSF failures? After the Samarco disaster much of the discussion has focused on tailings storage technologies and failure to follow best practices, but Bowker describes more fundamental macro-trends in the modern mining model that could be making serious TSF failures an inevitability rather than a possibility.

The big picture

As miners increasingly attempt to eke out profits against a background of declining prices and lower grades across virtually all metals, pressure to cut costs (and corners) can encourage a lax approach to the planning and management of TSFs, especially for smaller miners with less access to capital and expertise than the giants of the industry. Meanwhile, lower grade operations generate more waste for storage in TSFs that – perhaps due to geographical and topographical constraints – might not be adequate in the long-term.

Regulators worldwide, Bowker says, don’t take account of waste management in the permitting process, creating an unsustainable cycle of short-term profit-seeking at the expense of long-term environmental risk. In Brazil, Vale independently commissioned a report into the economic viability of expanding the Germano mine operation; the review highlighted the risk of expansion without adequate capacity for waste, but this warning appears to have been ignored, which Bowker describes as "an active assumption of risk and obviously the source of this catastrophic failure".

"The lower the grades go, the higher the volume of waste you produce, and the fact is that for all mines across the world under all permitting regimes, financial viability is determined without consideration of proper waste management. It’s not built into the consideration of the overall financial viability of a mine. If it were, quite a high percentage of permitted mines that are operating in the parameters of the law would not be acceptable to investors or regulators…I see that as the theme across all of the catastrophic failures; that they’re allowed to advance even though it’s known that they have no capacity and no plan for their waste."

A deficit of technology and expertise

"Dr. Chambers included, have called for a blanket ban on upstream tailings dams like Fundão."

Of course, issues over TSF design and technology have their place – some experts, Dr. Chambers included, have called for a blanket ban on upstream tailings dams like Fundão, for example.

Alternative technologies such as dry stacking and paste tailings, which involve the removal of water from tailings so that they can be more safely stacked in dry form, have been used before. But a combination of higher costs and the fact that they are only technically feasible under certain conditions has meant that tailings dams – some 3,500 worldwide – have remained the standard for the industry.

And beyond the technology available, there is also the issue of whether individual mining operations have access to sufficient expertise to make the best use of technology.

"One of the things that [Geologic Resource Partners founder] George Ireland is always saying is that the calibre of engineers available to miners globally has gone down so far that most of the decisions about mines at individual sites around the world, especially in remote sites, don’t even understand the technology or its proper use," says Bowker. "They’re just taking something off the shelf and plugging it in. So there’s this constant uninformed tinkering with the flow sheet that isn’t informed in the first place by what’s actually out there that’s right for this particular mine."

The road to change

Clearly, on the surface, improvements to technology and skills in the mining industry should play an important part in the collective response to tailings disasters. These sorts of improvements will likely be central to the recommendations after the catastrophe in Brazil. But if the problem extends to the very roots of mining metric, does there need to be change on a more fundamental level?

That’s the finding of Bowker and Chambers’s study, which in its conclusion argues that "regulatory systems must begin to understand and address financial capacity of the miner, and the financial feasibility of mining itself, both in permitting criteria and in oversight of mine water management over the life of the mine."

"What that means is we have to [reconsider] all existing mines and all existing mine expansions in terms of best technology and best use of that technology, and if a mine can’t show that – you don’t get your expansion plan," Bowker says. "You don’t get the permit. We have to live in the parameters of what best technology can deliver to us right now, and we have to assess what that is."

It’s unclear whether such sweeping changes to mining regulation would be possible given the vested interests involved, but the establishment of independent expert panels to serve permitting authorities on the technical and environmental issues of individual mines could hold the key to a safer and more environmentally sustainable future. Bowker highlights Canada’s MEND [Mine Environmental Neutral Drainage], the regulatory guidelines for minimising acid drainage, as a peer-reviewed, continually updating system of oversight that could serve as a good model for more effective waste management regulation.

"Financial risk is the same as environmental risk," concludes Bowker. "There is no wall between those two things. So if you build something that is a living, dynamic process that systematically takes account of environmental security risk, you’ll automatically be taking care of investor and financial risk. It’s all part of the same thing."