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Worldwide ORE2 Tailings Quantitative Risk Assessment Experience

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Mining Risk Assessment

Riskope’s worldwide ORE2_Tailings™ quantitative risk assessment experience can be summarized in one single graph that we will show below.

ORE2_Tailings is a subset of ORE (Optimum Risk Estimates) which is a “universal” platform for quantitative risk assessments and enterprise risk management we deploy for mining (i.e. tailings, open pits), transportation, forestry and suppliers.

We have deployed ORE for hundreds of operations worldwide. Today we will focus on tailings storage facilities.

Sample Portfolio for ORE2_Tailings Performance Summary

 We selected a sample portfolio encompassing 21 sites, with variable number of dams (between 1 and 9). They are in North and South America, Central and Southeast Asia and in Europe. The sites are anonymized; their names have been replaced by a shorthand for the country or continent followed by a number.

The dams are built following upstream, downstream, or centerline types of cross-sections. The stored tailings are the result of base and precious metals extraction. The dams may be active, inactive or closed.

In some cases, ORE2_Tailings was used to develop projections including raises, alterations and climate change effects. ORE2_Tailings is also being used to demonstrate As Low as Reasonably Practicable (ALARP) mitigation in compliance with the Global Industry Standard for Tailings Management (GISTM).

We aggregate each site’s dams by considering the extreme min-max scenarios for probability and consequences. This allows a “rectangle perimeter” display of the risks of the dams present at the site.

Often, risks have significant inverse correlation between consequences and probability. As a result, small consequences have high probabilities and larger consequences have smaller probabilities of a given hazard. A good example of this is the probability of car accidents: a minor fender-bender is way more likely than full loss of the vehicle. However, in the case of tailings, one can assume that probability of catastrophic failure and their consequences are rather uncorrelated, at least at the standard level of analysis that data allow. Indeed, the consequences of a catastrophic failure are not dependent on the probability of the failure, but rather on the population density downstream, topography, etc.

Worldwide ORE2_Tailings Quantitative Risk Assessment Experience

Below is the “raw” risk landscape we generated based on our ORE2_Tailings deployment experience. As one can see, it delivers general information on ranges, but does not allow for any risk-informed decision-making yet. We need to add information to increase its value.

Probability of failure per year

Probabilities: The range we see for this worldwide summary goes from 1E-06 to several percent, which is equivalent to saying that the studied dams varied from “the limit of credibility” to very near pre-catastrophic levels.

Consequences: We use the ORE2_Tailings built-in consequence evaluator. This considers the additive nature of consequences and converts all components into monetary values. The dimensions cover harm to people, environmental damages, physical losses, crisis and reputational aspects. More information is available in our book Tailings Dam Management for the Twenty-First Century. As one can see in the graph, consequences cover a very wide range, spanning from $10M to over $10B. Interestingly, there are two strong concentrations in the sample portfolio: one of consequences around $100M and other consequences between $1B and $10B.

Risks Benchmarking

Below we reproduce the same landscape with the worldwide benchmark thresholds we developed. If we look at the thresholds, the landscape starts to make more sense.

PoF world benchmark max and min

Notice how many sites “straddled” the min-max world benchmark band, meaning that, after all, there is a sort of convergence on the performance of tailing dams. This is not a surprise, because engineers around the world design dams using similar factors of safety criteria. However, what comes as a surprise is the wide range of resulting probabilities. That range is the result of varying levels of care, maintenance, governance and management from site to site.

This graph enables a first dialogue with the owner and the engineer of record. However, it is not enough to really define a sensible roadmap to portfolio mitigation because it does not help discern which sites or dams can cause the most damage to the owners and the public. 

Risk Triaging Plan

The ICMM “Tailings Management: Good practice guide” includes the following definition of ALARP:

“ALARP requires taking all reasonable measures with respect to ‘tolerable’ or acceptable risks. The idea is to reduce them even further until the cost and other impacts of additional risk reduction are grossly disproportionate to the benefit [based on the definition provided in the Standard].”

and also:

“One can then evaluate the acceptability of the risks considering the potential consequences for health and safety, social, environmental, financial and other factors that may occur (risk evaluation). Once one assesses the risks, it is time to develop risk management plans. The goal is to eliminate, reduce or mitigate, and communicate the risks.”

We can see that following ICMM/GISTM tailings dam risk management must include the notion of tolerable risk. Thus, we reproduce below once again the risk landscape adding a sample risk tolerance threshold for a large mining company (in red).

Sample risk tolerance threshold

Now We Can Immediately Say:

Risks: Many North American sites we studied fall into corporately tolerable territory for large companies (i.e. under the red curve) due to location, land use and topography. Note that the probabilities of failure can be quite high for some sites. This indicates poor conditions, standard of care, maintenance and monitoring. However, most sites in this portfolio fall in the intolerable territory (above and right of the red curve), even for large companies.

Armed with the risk landscape, we can also swiftly evaluate which sites represent strategic or tactical risks and therefore require varying degrees of attention.

Focusing on the intolerable risk sites:

  • Sites like Can 4 and US 1 are intolerable but partially manageable. Indeed, mitigation can occur by reducing the probability of failure of some of their dams. Hence, they represent tactical risks for the owners.
  • Sites like EU and BR 1−4 are mostly intolerable and unmanageable within the realm of credibility. Therefore, they represent strategic risks and their mitigation requires strategic shifts, such as altering the system.

Risk Tolerance Roadmap

Another reason to consider risk and risk tolerance is that we can deliver a roadmap for a large portfolio in a systematic and transparent manner.

Risk tolerance roadmap

Ranking the sites by decreasing intolerable risks we deliver a clear prioritization roadmap for management.

Closing Remarks

The selected portfolio indicates that, despite similar deterministic criteria used during the design, significant ranges of probabilities arise due to varying standards of care, monitoring and maintenance.

Prioritizing based on only consequences can lead to misallocation of funds and time by focusing on the wrong dams. Tailings dam risk management must include tolerance/acceptable threshold to provide meaningful answers.