Mines will be getting much harder look by investors and insurers after the recent tailing failures that have been in the news, says Harvey McLeod, a senior engineer at Klohn Crippen Berger.
“The recent failings we’ve had at Samarco and Mount Polley highlighted to miners, the public and regulators that there are risks with mining,” said McLeod, who is vice president of strategic marketing and a principal.
MINING.com spoke to Harvey McLeod in early January about how to assess risk and make mines that are resilient, which can better withstand potential failures.
Attend Risk and Resilience Mining Solutions 2016 this November in Vancouver, Canada
McLeod has a bachelors in geological engineering and masters in soil mechanics. He is currently sits on the International Commission of Large Dams and Chairman of the Tailings Sub-Committee. A lightly edited transcript follows:
MINING.com: What is risk assessment and why is it important?
Harvey McLeod: Risk assessment is the process of identifying problems and what can go wrong. It’s an important element in everything we do. We all do risk assessments when we wake up in the morning or step across the street, so understanding your risk and what the problems are is an important part of the risk assessment. At mining companies it effects the social component in respect to having the social license to operate. It also affects the financial component for raising money. The recent failings we had at Samarco and Mount Polley highlighted to miners, the public and regulators that there are risks with mining. It’s understanding those risk and managing those risks that is an important topic we want to stress at Risk and Resilience Mining Solutions 2016.
MINING.com: How can risk assessment reduce the probability of tailings failure?
Harvey McLeod: Well as I mentioned before, if you don’t know you have a problem you are not going to manage it. The process of risk assessment is really getting everybody to think about what could go wrong, because if you have some ideas of what could go wrong, then you can start implementing both management practices to manage the risk but also engineer or design other procedures which will reduce the likelihood or the consequence of something happening. It’s important to illustrate that risk is a combination of two things: it’s the likelihood that something will happen and the consequence.
MINING.com: What role does risk assessment play in mine financing?
Harvey McLeod: Well I will think you will see with these recent failures that there’s been a large drop in the equity of the companies. Moving forward you will see financiers and shareholders saying: “Wait a minute, if I am going to invest my money in this company, what are the risks?” Insurers will be asking the same questions. Traditionally insurance companies haven’t focused on tailings dam failure. It’s been more of a global insurance policy. And certainly after the Omai and Los Frailes in the late ’90s insurers started asking, “Should we have different systems for insuring mining companies?”
We all do risk assessments when we wake up in the morning or step across the street
MINING.com: What is the Risk and Resilience Mining Solutions Conference?
Harvey McLeod: There are two components here: risk and resilience. The risk, as I talked about, is the likelihood or consequence of something happening. There’s a lot of techniques and methodology for identifying risk, and they vary from the very simple ones where you are looking at failure modes and effects to very complex probabilistic systems that they would use say for NASA. So there are a lot of different tools, but that is just the risk assessment. The resilience part—and that’s been a big part of my career—is designing systems which are resilient: they are more robust and less likely to fail. And if something does happen the consequences are less. So I think it is getting inside the mindset of practitioners, engineers and operators to build more resiliency into their systems.
MINING.com: Why should someone attend?
Harvey McLeod: Well, it can benefit the whole industry. Senior managers, CFOs and CEOs can understand what tools are out there for assessing risk. At the conference there will be interaction with practitioners, with regulators and with financial people. Mine owners are asking if their dams are at risk for failing? What risk system do we they have in place? How can they be strengthened? So at a corporate level it’s important for managing the shareholders and corporate aspects. As for insurance companies, it’s important if they are going to be facing claims. For example, how are insurance companies going to structure premiums in the future and what is their approach to risk assessments? So I think for them to understand both the technical components of different things that can go wrong would benefit them. So a conference like this where you are sharing experiences with risk assessments and among your peers and different professionals from other areas is an important part in just building the state of practice for both risk assessment and for better management of both governance and design of tailings and mining facilities.
And certainly after the Omai and Los Frailes in the late ’90s insurers started asking, “Should we have different systems for insuring mining companies?”