It is interesting to read about tailings dam failures from an insurance perspective. Riskope has helped resolve miners’ denial of insurance claim issues for the last 15 years. Riskope also recognizes the issue is becoming much wider than mining due, for example, to climate change impacting other industries and residential claims.
Tailings Dams
Recent papers from the insurance company Willis Towers Watson states that there are two tailings dam failures per year. In our 2013 paper (Oboni, C., Oboni F., Factual and Foreseeable Reliability of Tailings Dams and Nuclear Reactors -a Societal Acceptability Perspective, Tailings and Mine Waste 2013, Banff, AB , November 6 to 9, 2013), we estimated that there were 10-3 major failures per dam per year for the decade 1975−1985, and 2*10-4 for the decade 1995−2005. Based on an estimate of the number of active dams, we then concluded there would be between 0.7 and 3.5 major accidents per year on this planet, on average, which agrees with world events and Willis Towers Watson’s statement.
At the time of our 2013 paper, there was no consensus of what constitutes a major, significant accident. As a result, we examined 100 years of failure records. There is still some leeway in what people define as a failure, which requires attention and filtering. For example, one of the most comprehensive records of accidents (www.wise-uranium.org/mdaf.html) lists as tailings accidents events such as a 14-metre-wide sinkhole appearing in a phosphogypsum stack which contaminated a major drinking water resource, as well as the rupture of a section of the geo-membrane layer/overflow after heavy rain, which should not be considered without attentive scrutiny.
The Insurance Perspective
The Willis Tower Watson paper cited above states the following: “It has become the new norm that insurers are requesting copies of the latest third-party dam inspection reports as well as flood inundation studies – if available.” It then continues: “Demand for these reports and studies are likely to increase as climate change forecasting points to the likelihood of more rainfall and extreme weather events.”
From these two statements, we extract three points for discussion.
Discussion 1: Third-party Inspection and Knowledge Base
By asking for the latest third-party inspection, the insurer will not be able to evaluate many aspects that can potentially drive a tailings dam failure. Indeed, many key risk indicators (KRIs) lie deep in the foundations and history of each structure. Dams can fail because of inceptual defects (e.g. insufficient depth of investigation, geological understanding, etc.), poor management (e.g. normalization of deviance) and many other causes that will not be understood by reading only the latest third-party inspection.
As we expressed in an ICOLD 2019 paper, KRIs are generated from choices and historical evolution related to, for example, material, berms and erosion, cross-section, supervision, maintenance, monitoring, divergence from plans and known errors and omissions. None of those tailings diagnostic points would be fully captured by a latest third-party dam inspection.
In other words, understanding the history of a structure from inception is paramount and cannot be made by simply reading the latest third-party inspection. Reading and creating the knowledge base for each structure is a daunting task; that’s why at Riskope we have created a specific approach with Epiq, a global leader in electronic discovery and data review, to build a knowledge base for dams.
Discussion 2: Flood Inundation Studies
Many dams have never been the object of an inundation study based on dam breach analyses. The reason is that these are generally expensive, highly uncertain in their results due to the complexity of the tailings rheology and require very detailed topography.
At Riskope, we have created an empirical multi-dimensional consequence model which is fast, economic and has been calibrated on the last decade of catastrophic failures on top of various deployments. It delivers an estimate of the losses, directly usable by the insurers.
Discussion 3: Climate Change
Climate change is rapidly altering the conditions under which the tailings dam systems were designed and insured. The first victims of climate change may be the ancillary water management structures such as diversion ditches, spillways, etc. As a result, tailings systems, although apparently code-compliant, may be way less resilient than perceived. Here, too, the latest third-party inspection will fall short in revealing the history of these elements and detecting their potential deficiencies and potential interdependencies with the dam.
Again, we see the need to build a historical knowledge base in order to activate balanced and viable action plans which will benefit both the insurer and the insured.
Tailings Dams Failures Insurance Perspective
In order to fulfill the tailings dams failures expectations from an insurance perspective, we see the need to rely on a solid knowledge base creation system, an evaluation of the probability of failure of the dam system, using a fast and efficient approach such as ORE2_Tailings™ and a simplified empirical dam breach evaluator (also included in the ORE2_Tailings methodology).
Deploying the above will help resolve denial of insurance claims. It will also enhance safety through tactical and strategic planning in a win-win environment.
