Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Risk resilience is a term that I heard for the first time today. The people who used the term assure me that it is not new, just not recognized in mining for its power. There was a conference last year in South Africa on risk resilience in mining. There is a successful consultant on the topic in Australia.
Anybody can do it; or so it is claimed. Every mine and mining company should do it, so it is claimed. In principle it is simple. Make sure your operations, company, mine, or system is resilient to the occurrence of a risk and the resulting consequences. Make sure that if the tailings dam fails, or if the pit is flooded, or the slope slides, that you are not out of business. Formulate and put in place systems and procedures to ensure that you and your organization recovers fast and sound when the disaster happens. This all sounds so prudent and simple. Yet I wonder.
I believe the Black Swan can still beat you down. Recall that the Black Swan is essentially an unpredictable event with severe consequences. It is the outcome of complex systems that are more than the sum of the parts. Such systems exhibit emergent behavior and thus beat the best brains in predicting them.
At the other end of cynicism, maybe risk resilience is just the old Emergency Response Plan by another name. Maybe we have been doing it all along, and have now gotten overtaken by verbal innovation that is not really a new way of thinking or acting.
Of course there are always new risks in mining. How many mines are ready for a cyber attack? Are mines truly prepared for a long and deep depression of commodity prices? I know of no mine that is prepared to deal with an unprecedented failure of their tailings facility.
So maybe you should take another look at your mine and rethink things via the paradigm of risk resilience. What do you think?
For more from Jack Caldwell, see his blog, I Think Mining
Image: Shutterstock.com
