Have you seen changes in the approach to water-management, both from a business and government perspective?
In general, I have seen the mining sector’s views on water change a lot in a relatively short period of time. Today there is a better appreciation of the resource, as both a liability and an asset. There have also been regulatory changes requiring companies to understand, quantify and mitigate water impacts associated with mining. If we think about it, environmental regulation for the mining sector is not very old, especially abroad. We have noticed an uptick in both environmental regulation and how much regulation focuses on water.
Regulators in foreign jurisdictions are becoming more conscious of water and mining. New regulations are being created and old regulations are being reformed to promote better water use and quality. One of the drivers for this increase in concern is that the impacts of climate change on water resources are becoming evident and observable. This is especially true in places with high water risks. One example is northern Chile, where there are competing agricultural and industrial demands for groundwater resources and an increasing scarcity of surface water. Another example is Peru, where the rapid retreat of tropical glaciers in the Andes — where much of Peru’s mining occurs — is threatening water supplies for downstream communities and industries. Another driver for the increase in water-related concern is recent tailings failures and the increased appreciation for water’s role in dam failures and dam failure consequences.
In terms of business, water management is becoming an important consideration for investors. Evidence of this increase in attention is that frameworks for disclosing information on water-related risks and financial and social penalties are being developed, and companies are developing and implementing internal standards for water management planning.
Can you comment on how the regulatory framework in Ontario is evolving?
One change that will come into effect in 2021 is that under the federal Metal and Diamond Mining Effluent Regulations there will be lower limits on some metals and a new limit on un-ionized ammonia for effluent discharges at all mines in Canada.
Specifically in Ontario, in 2020 there will be some minor changes coming in industrial effluent discharge permitting at the Ministry of the Environment, Conservation and Parks. Generic discharge authorizations granted under the Municipal-Industrial Strategy for Abatement will be replaced by site-specific permits. This is part of a shift towards receiver-based permitting as opposed to emitter-based permitting.
The Ontario Ministry of Energy, Northern Development and Mines is now responsible for the review and construction inspection of new tailings dams, as well as the review of dam safety reports and dam safety inspections for existing tailings dams.
The current Ontario provincial government has also promised stronger enforcement of environmental legislation by expanding the use of fines for environmental contraventions.
Which notable water management projects has SRK been involved in recently?
One of our current projects has to do with mitigating ammonia at a gold mining operation in Northern Ontario, where we completed an evaluation of different ammonia reduction and treatment options. Our role was to identify the solution or solutions that would provide the greatest benefit with the lowest implementation risk. In parallel, we carried out a trial aimed at enhancing the natural degradation of ammonia occurring with their existing water management infrastructure. The idea was to promote the right biogeochemical conditions so that more ammonia would be attenuated by microorganisms. For the same operation, we have supported water management decision-making processes and helped to integrate new solutions into existing systems. At another gold mining operation in Northern Ontario, we are completing a similar technology evaluation, but in this case for phosphorus mitigation.
We have been recently involved in two projects at closed sites in Ontario that focus on the long-term management of water treatment residuals in terms of storage capacity and biogeochemical stability.
We also carry out due diligence studies for companies that want to evaluate an operation’s water-related risks. At present we are providing this service to an Australian company that wants to invest in an operation in Ontario.
What are the main risks and considerations for a mining operation from a water management standpoint, and what advice would you give to project developers in this regard?
The nature of the main risks depends on several site-specific factors, including climate, geology and geography. However, there are some broads sets of precautions that I would urge decision-makers to consider taking. The first involves ensuring that the site has an adequate water supply, that the water balance considers a range of climatic conditions and that discharge requirements are understood. Evaluate enough different scenarios to be comfortable that there will be sufficient water to support operations; a few Canadian mines recently had to cut production because they ran out of water, which is not an issue we typically encounter in Canada. Scenario evaluations will also help to understand the range of discharge requirements and potential effects on the receiving environment.
Secondly, engage with regulators and communities early in the process of developing a water management strategy. Make sure that permitting requirements are well understood and that the community is on board. You don’t want to get part-way through a permitting process only to find out that you’re not fulfilling regulatory or community requirements and cannot operate. Permitting issues can, and will, affect reputation and returns on investment.
And thirdly, make sure you have a good compliance record and that your water management infrastructure is doing what it was designed, built and permitted to do. Keep up with inspections, monitoring and maintenance. Update models as required to reflect changes to water management infrastructure. Focus on operational improvements that reduce fresh water demands and discharge requirements, and don’t forget about your treatment system: make sure you discharge the best quality of effluent that is possible.
My advice to project developers is to look at, and plan, water management early on. This approach gives the best chance of avoiding risks and successfully tackling issues. Also look at water management at integration level — combining water, waste and mining. If you do not have the necessary internal capabilities, seek expert help to develop a water management strategy appropriate to the site’s climate, geology, geography and regulatory framework. This will help to avoid poor decisions that initially seemed appealing from an economic perspective and to ensure that project goals remain deliverable.
