The Samarco disaster, which last year claimed the lives of 19 people in Brazil, destroyed homes, cut off water supplies and damaged landscapes, is a warning to mining companies that mismanagement of their environmental eyesores is going to be punished like never before, with monumental financial claims hitting them left, right and centre.
BHP Billiton and Vale have both certainly not heard the last from litigants and they must still do a lot more to repair their shattered images.
How diligently these mining companies audit their financials and how abundantly they reward their accounting staff.
Guess what – in future, they are going to have to devote as much attention to the muck they produce as the money they seem to worship.
The International Council on Mining and Metals (ICMM) is doing the right thing by calling its members – which include the who’s who of mining – to order by adopting a range of new measures to manage tailings dams.
The ICMM’s new position statement commits members to minimise the risk of catastrophic failures of tailings dams by adopting six key elements of management and governance.
Top of the list is accountability, followed by responsibility and competence, planning and resourcing, risk management, change management and emergency response.
The position statement has been unanimously endorsed by all CEOs of member companies, and members are expected to implement commitments to the position statement by November 2018.
ICMM CEO Tom Butler has been firm and failure of any mining companies to respond, including non-ICMM companies, will be at their peril.
Meanwhile, Fitch Group research arm BMI says that the value and production growth outlook of the global mining industry for 2017 will gradually improve over the course of the year as metal prices trend higher.
BMI sees modest positive metal pricing over a 12-month horizon, boosted by constrained supply, improving demand and rising global inflation.
That will take place in the face of waning Chinese demand and a disappointing impact on US metal imports from President-elect Donald Trump’s much-touted infrastructure package.
Instead, it sees metal prices remaining stable rather than rebounding, prompting a value increase of only 0.7% year-on-year, but accelerating thereafter to 2020.
On the local front, the Chamber of Mines of South Africa has done well to sober up Parliament’s Portfolio Committee on Mineral Resources about its inability to make its usual contribution to the South African economy in the face of hostile Department of Mineral Resources (DMR) decrees. Because of errant DMR behaviour, the once strong South African mining industry is being brought to its knees.
The DMR must be told in no uncertain terms that it is destroying a valuable national patrimony and ruining the country’ economic growth prospects.
Every bit of potential that the South African mining industry has to grow has been shamelessly stripped away by a gazette-happy DMR that is displaying gross disregard for future generations.