Editorial: Mining and CSR, part II

In part I last week, we began our look at how three high-profile accidents at Canadian-operated mines in the mid-1990s provoked fundamental changes in the Canadian mining industry, and focused on a spill at Placer Dome’s Marcopper mine in the Philippines. This week we delve into the next two spills.

Companies involved in the Omai and Los Frailes failures in Guyana and Spain, respectively, also took hits in the court of public opinion, but managed to better weather the storm of negative publicity because of their perceived speedier and more effective response to the incidents.

In the case of the Omai mine operated by Cambior (now merged with Iamgold (IMG-T, IAG-N), the tailings dam failure on Aug. 18, 1995, released 2.95 million cubic metres of wastewater containing 28 parts per million cyanide and large quantities of suspended silt into the Omai River, which flows into the Essequibo, Guyana’s main inland waterway.

Subsequent reports delivered conflicting information about its effects, including claims of skin burns and irritations, and dead fish, pigs and jungle animals. A government-appointed commission of inquiry discounted most of the reports and found that the effects had been minor, with only 350 dead fish collected immediately after the incident.

A subsequent case study found that prompt action by mine-site employees had prevented what could have been a disaster. Within 15 minutes of learning of the discharge, crews excavated a diversion ditch to carry a large portion of the flow to the main pit, while a speedboat was sent downstream to alert residents along the river. Within hours, senior managers were on site to handle the crisis and manage remediation efforts.

The commission of inquiry did not find criminal liability on the part of Omai’s owners or contractors, in part because it was “uncertain at what stage of the dam’s construction the faulty work took place and therefore difficult to fix liability.”

The commission did conclude however, that a component of the dam intended to give it structural stability had not been built to its specified design, allowing the fine-grained material in the core to fail.

While much activist energy was devoted to disseminating reports of health risks caused by “cyanide-laced” tailings, monitoring by various government and multilateral agencies (including CANMET in Canada and the Environmental Protection Agency in the U.S.) concluded that no person was exposed to free cyanide levels above the limit accepted as the Canadian guideline for drinking water.

Various court cases followed, most of which were ultimately dismissed. Notwithstanding, cleanup and related costs topped $20 million, including lost production over the 6-month closure.

Cleanup costs at the Los Frailes mine topped $100 million, exclusive of costs related to a flurry of lawsuits launched by various parties even after a criminal investigation and subsequent international commission jointly acquitted Boliden (BLS-T) of responsibility for the accident, and instead found that the problem arose from design and construction defects.

The incident occurred April 25, 1998, when a 50-metre section of a dyke failed, releasing about 4 million cubic metres of wastewater and another 1 million cubic metres of solids (containing various dissolved metals and sulphate ions) into a nearby watercourse and into flat lands along the banks of the Guadiamar River.

Subsequent satellite imagery showed than a 21-sq.-km area had been inundated by the spill.

Greenpeace described the discharge as “a huge tide of poisonous waste” at the time, but did not provide precise figures to back its claims.

The discharge was stopped on April 26, by which time it had flowed into the Rio Agrio watershed, which flows over pyritic bedrock and has a natural pH near 4 (about the same as acidic rain), adding to an already nasty situation.

Boliden reported that most of the solid material had settled downstream of the breach, and that about 95% of the material had been transported no more than 10 km from the dam.

For whatever reason, the company seemed hesitant to point out (until much later) that it had not built the dam, which was constructed in the 1970s by a previous operator to store wastes from the Aznalcollar copper-zinc mine, perhaps out of fear of offending its host nation.

By most impartial accounts, Boliden’s response was rapid, competent and generous. Subsequent investigations concluded that the failure was triggered by slippage of a shear zone below the dam, rather than in the dam itself.

Spanish courts ruled that criminal charges against Boliden could not be laid in connection with the tailings spill, as the company had played no clear role in construction of the tailings dam.

Even so, the company’s plans to become a major player in the global mining industry were dealt a severe blow.

These and other environmental accidents and incidents triggered industry introspection on an unprecedented scale.

At the same time, NGOs and other agencies conducted studies that showed steadily eroding support for resource development, particularly in developing nations. The anti-globalization movement was then on the rise, with all extractive industries caught in the crosshairs.

Next week: part III