Highlights
- Over the past 20 years, the mining industry has experienced several major tailings disasters including the devastating Brumadinho failure which triggered a regulatory and industry-wide safety review of tailings dams, and changed the insurance landscape very rapidly
- The insurance industry has now realised the exposure that these dams present and are evolving their cover and terms to protect their business
- Find out the different types of TSFs
- See what score you get for your TSF management
- Decipher and K2Fly have created an integrated TSF solution to help miners visually demonstrate good governance
- Watch this vodcast, Working towards zero harm: tailings monitoring and governance in 2021
- Download this FREE guide to find out about the available solutions to help implement the Global Standard on Tailings Management
- Are you ready for the next round of Investor Mining and Tailings Safety Initiative reports? Watch this FREE webinar to learn more
Find out about the 57 major tailings dam failures (2000 – 2020)
The devastating disaster resulted in the operator posting a USD1.6bn loss in the first quarter of 2019 after they incurred expenses of USD4.5bn related to physical damage, business interruption and decommissioning. In light of this, the insurance industry has been revisiting its approach and has been eagerly awaiting the release of the Global Standard on Tailings Management for further guidance.How has this impacted mining operators?
Almost overnight, insurers were waking up to the full financial impact that a significant tailings failure can have on their business, resulting in a complete overhaul in underwriting guidelines. As a result of this, mining operators have experienced substantial premium increases and a decrease in insurance cover. According to Matthew Johnson, Head of International Mining Industry Underwriters (IMIU), mining companies now have to demonstrate they have a grip on the maintenance of both old and new dams if they are to secure cover for tailings storage facilities.“The insurance industry and clients will have to come around to the exposure these dams present and evolve cover and terms to protect insureds, but on a sustainable basis for the insurance market.” – Matthew Johnson, Head of IMIUInvestors and banks also want to know that their respective activities are protected, and no insurance generally means no loan or capital.
See what score you get for your TSF management
Given that insurance premiums have recently significantly increased while the insured value has dropped approximately between $200-$300k per operating facility, insurers can afford to be very selective in where to put their capacity. In order to secure a satisfactory insurance renewal outcome, mining companies will need to:- be transparent in the assessment of risks as cover is based on risk-adequate prices and conditions
- make risks quantifiable by fulfilling its obligation to do whatever is necessary to avoid an incident from occurring, as the insurance industry is only willing to assume risk that is assessable
- show that the facility adheres to certain standards and is compliant
- meets the industry’s public disclosure requests (such as the Investor Mining and Tailings Safety Initiative/Church of England)
- work with underwriters on third-party engineering reports (audit reports and dam break analysis)
- follow-up on any resultant risk recommendations from the audits
- comment proactively on any outstanding recommendations as highlighted within each third party audit or report, including status updates and anticipated timeline to completion
- include their own in-house geotechnical engineers and tailings management group in the insurance placement process
How to utilise technology to reduce insurance premiums
After hearing the industry’s challenges following the Brumadinho tailings disaster, the Investor Mining and Tailings Safety Initiative disclosure request and the launch of the Global Tailings Standard (GTS), Decipher and K2Fly have focused their respectively core technology on designing an integrated TSF cloud solution to help companies improve compliance, monitoring, reporting and disclosure of tailings data. Drawing on years of experience in mineral resource governance and reporting, Decipher and K2Fly’s solution is helping miners improve investor sentiment and compliance, reporting, operational visibility, and work towards zero-harm. Armed with the new solution, customers will be able to visually demonstrate their commitment to good governance and implementing standards, ability to maintain both old and new dams, and as a result, provide them with the tools needed to potentially negotiate their insurance premiums down. The solution draws on Decipher’s powerful monitoring capabilities which has been built with Google Earth Engine at its core, and brings a variety of tailings data such as IoT devices, LiDAR, radar, CCTV, drones, inspections and remote sensing into one central location, offering customers an earth observation and visual approach to their TSF monitoring. In addition this, Decipher has advanced tools such as InSAR Displacement which integrates with industry leading providers so that users can more effectively monitor, measure and detect deformation of land surfaces over time and be automatically alerted to customer defined exceedances, driving greater safety precautions and reducing risk.Learn more or request a demo
Download this FREE guide to find out about the available solutions to help implement the Global Standard on Tailings Management
FAQ:
How has the insurance industry changed since the Brumadinho tailings disaster?
Until the catastrophic failure of the tailings dam at the in Brumadinho, Brazil which caused a tidal wave of 11.7 million cubic meters of mining waste, killing 270 people, most mining companies had been able to transfer part of their tailings exposure into the insurance market, be it through their General Liability, Property or Environmental Liability Insurance programs as there was no specific ‘tailings storage facility insurance’. Almost overnight, insurers were waking up to the full financial impact that a significant tailings failure can have on their business, resulting in a complete overhaul in underwriting guidelines. As a result of this, mining operators have experienced substantial premium increases and a decrease in insurance cover, and are now required to visually demonstrate their monitoring and governance of facilities.
How can I reduce our mining/tailings insurance premium?
Given that insurance premiums have recently significantly increased while the insured value has dropped approximately between $200-$300k per operating tailings storage facility, insurers can afford to be very selective in where to put their capacity. In order to secure a satisfactory insurance renewal outcome, mining companies will need to: • be transparent in the assessment of risks as cover is based on risk-adequate prices and conditions • make risks quantifiable by fulfilling its obligation to do whatever is necessary to avoid an incident from occurring, as the insurance industry is only willing to assume risk that is assessable • show that the facility adheres to certain standards and is compliant • meets the industry’s public disclosure requests (such as the Investor Mining and Tailings Safety Initiative/Church of England) • work with underwriters on third-party engineering reports (audit reports and dam break analysis) • follow-up on any resultant risk recommendations from the audits • comment proactively on any outstanding recommendations as highlighted within each third party audit or report, including status updates and anticipated timeline to completion • include their own in-house geotechnical engineers and tailings management group in the insurance placement process
Effectively monitor your tailings storage facility with Decipher
- View real-time data and receive exceedance alerts
- Monitor land movement with remote sensing and InSAR datasets
- Visualise real-time LiDAR data with insights into dam movement
- Securely store and access all of your tailings data in the one place
- Upload and reference key documentation
- Visualise facilities across multiple sites in a single screen on a geospatial map
- Monitor your facilities with InSAR, LiDAR, DEM and more
- Capture a wide range of monitoring data and indicators su ch as surface and groundwater, decant pond water levels and quality, and embankment conditions
- Capture and track obligations and conditions around your licence to operate to manage your key risks and actions
- Action and task delegation for data collection with reminders
- Maintain and track environmental monitoring compliance limits and exceedances
- Manage and engage with all of your stakeholders with one central repository
- Convert your engagements into actionable outcomes
- Forecast, plan and track your sites activities using IBM’s Weather data
- Create corporate report templates and meet requests for data provision from industry groups such as ICMM, Global Tailings Portal, PRI and UNEP
- Integration capability with third party systems or public portals such as the Global Tailings Portal
Want to find out more about tailings storage monitoring?
|