Tailings Facilities - An Introduction from an Insurance Perspective

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Tailings Facilities - An Introduction from an
Insurance Perspective

• Risk Evaluation for Existing
• Tailings Facilities

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The purpose of risk evaluation is to understand
the performance of the facility. IS IT SAFE
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Steps in Risk Evaluation

• Audit the facility - collect background
  information, describe the system, visit the site,
  identify basic fail modes, compare design
  criteria to established standards
• Qualitative Risk Assessment - identify failure
  modes for each component of the system, estimate
  probability of failure for each mode, estimate
  consequences of failure, bin or rate risks
• Quantitative Risk Assessment - use event tree
  techniques to better estimate probability of
  failure and as a basis for remediation (decision
  analysis)

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Sources Of Risk In Tailings Dam Safety

• Operations - lack of appreciation by operators on
  dam safety issues later changes to operating
  rules (e.g. Adding mini-hydro would change focus)
• Surveillance and monitoring - deficient
  surveillance and monitoring programs reasons for
  instruments not clear just going through
  routine of collecting data

• Design - upgraded design standards (e.g.
  increasing PMF estimates)
• Construction - inadequate QA/QC actual
  conditions differ from assumed
• Organization - inadequate definition of roles,
  responsibilities procedures
• Emergency Response Plan - does not exist or is
  not updated

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DEFINITION OF AUDITfrom theCanadian Oxford
Dictionary

• Detailed examination or analysis, especially to
  assess strengths and weaknesses
• (environmental audit, safety audit)

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Tailings facility audits are more complex than
reviews for water-retaining dams because

• Chemical contamination is much more likely
• Tailings facilities are in a combined
  construction/operation phase until closure
• Tailings dam site alternatives are much more
  restricted and
• Closure adds additional complexities.

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Audit Against Regulation and Good Practice

• REGULATION
• Water quality regulations - provincial and
  federal
• Dam Safety Regulations (e.g., Chile, Alberta, new
  regulations in Ontario) and
• Where regulations not in effect regulations from
  other jurisdictions are adopted as standards
  e.g. WHO

• COMMON LAW
• MAC Guidelines (1998)
• Canadian Dam Association (1999) earthquake and
  flood only
• ICOLD tailings publications
• Accepted practice of jurisdiction of court, not
  jurisdiction of mine site

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AUDIT ELEMENTS

• Review of background information
• Site visit
• Identify tailings disposal risks
• FMEA and
• Audit communication.

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Principal Methods Of Risk Analysis

• Failure modes and effects analysis (FMEA)
• Failure modes, effects and criticality analysis
  (FMEA, an extension of FMEA
• Hazard and operability studies (HAZOP)
• Event tree analysis
• Fault tree analysis

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Risk analysis

• FMEA, FMECA and HAZOP are similar in form
  structured to stimulate a group of people
  (workshop environment) to apply foresight in
  conjunction with their knowledge to task of
  identifying what if? Questions
• Event trees and fault trees are more complex and
  costly focuses in details
• FMEA/FMECA are most commonly used in pragmatic
  risk analysis
• Event/fault trees may be used later for failure
  modes where further insight into failure process
  is considered of benefit

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Elements Of FMEA Table

• Confidence in assigned likelihood (uncertainty)
• Compensating factors and possible treatment
  measures
• Triggers and precursors to enact treatment
  measures

• Component of facility
• Potential problem
• Severity (consequence) of problems
• Likelihood of problem occurrence

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Typical FMEA Table
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Word Descriptor Scales For Risk Parameters

• Risk parameters in FMEA treated by using four or
  five-level word descriptor scales (a numerical
  rating can be assigned if desired)
• Word descriptor scales greatly assist internal
  consistency amongst workshop participants and
  external consistency between various dams (if
  required)

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Example Of Likelihood Scale
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Example Of Confidence Scale
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Severity (Consequence) Scale

• Word descriptor scale for severity or
  consequence requires input from dam owner, to
  reflect specific corporate views and specific
  project requirements
• Several categories of consequences may be
  established such as functional performance,
  personnel safety, downstream damage, loss of
  revenue, corporate image or regulatory impacts

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Example Consequence Scale For Corporate Image
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Risk Characterization
High Risk
Low Risk
E
High Risk
H
High Risk
Moderate Risk
M
SEVERITY/CONSEQUENCES
L
Low Risk
Low Risk
N
Negligible Risk
M
H
L
N
E
LIKELIHOODS/PROBABILITIES
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Basic FMEA Process

• COMPONENT 1 - SITE VISIT AND REVIEW
• Understanding of system and function of
  components
• Established context of FMEA and terms of
  reference
• Interviews with operators, etc.
• Establish risk parameters (especially consequence
  descriptors) with dam owner
• Develop project specific FMEA table
• Decompose system into basic components

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Basic FMEA Process..Contd

• COMPONENT 2 - CONDUCT WORKSHOP
• Risk facilitator and practitioners experienced in
  dam safety and, of prime importance, key staff
  from the owner (operators, managers, supervisors,
  etc.) Responsible for, most familiar with, the
  facilities
• Role of facilitator and external practitioners is
  to scrutinize expressed opinions and
  judgmentsfacilitates team towards aligned
  ranking
• Workshop typically intense periods of
  uninterrupted review and documentation

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Basic FMEA process..Contd

• COMPONENT 3 - DOCUMENTATION
• Proper documentation is essential of any risk
  assessment process
• Need to document not only the results, but also
  the methodology, rationale, available information
  and compensating factors which led to the
  judgmental likelihoods assigned by the
  participants at the time of the workshop
• Provides basis for update as new information
  becomes available (e.G. Implementation of risk
  reduction measures)

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Benefits Of FMEA Workshop

• Powerful, yet simple and pragmatic
• Does not dwell on numerical detailing, but still
  captures important essence of uncertainty/risks
  in easily understood format
• Multi-disciplinary nature and workshop
  environment fosters team approach to decision
  making and risk management
• Operators achieve better understanding of risks
  and related dam safety issues
• Encourages buy-in at all levels essential for
  effective risk management

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Typical Outcomes of FMEA

• Provides risk profile for owner, including
  business risks and liabilities from all
  contributions (not just extreme events)
• Allows prioritization of risk contributors, as
  basis for allocation of available funding
• Identifies deficiencies or upsets in operations
  of the facility, so improvements can be made

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Typical Outcomes Of Fmea.Contd

• Better understanding the major risk contributors
  allows optimization of surveillance and
  monitoring program (defensible rationale for
  additional devices or decommissioning of devices)
• Assists in optimizing maintenance schedule for
  components according to vulnerability and risk
  contribution
• Identifies gaps in owners organizational
  reporting structure and/or procedures

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Typical Outcomes Of FMEA..Contd

• Notwithstanding any identified deficiencies in
  handling extreme events (MCE, PMF), results are
  useful to set priorities towards being as safe
  as possible until improvements can be made
• Provides support for selection and justification
  of risk reduction measures (both structural and
  non-structural)
• Paper trail of due diligence process

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Summary

• Audits and formal risk assessments now in
  widespread use throughout mining industry
• Management involvement is key factor in success
• Single individual needs tailings responsibility
• Documentation/procedures need improvement
• Instrumentation needs upgrading
• Annual tailings report to track risk and
• Closure plans need continual updating.