By Alistair MacDonald 

The world's largest miners have published global standards for building and managing mine-waste dams, including guidelines aimed at making the safety auditing of the giant structures more independent.

The International Council on Mining & Metals, an industry body of over two dozen of the world's biggest miners, hired experts to draft the new guidelines in the wake of a 2019 mine-waste dam failure near Brumadinho, Brazil, which killed 270 people. Authorities there have, in part, blamed a conflict of interest between the dam owner, Vale SA, and an outside auditor, for masking structural faults that led to the collapse of the dam.

The new guidelines, released Wednesday, seek to address potential conflicts of interest, saying, for instance, that independent auditors and review boards hired to check the structures' safety shouldn't also have worked on the dams' design, construction or operation. The guidelines also say mining companies should have a specific mine-waste expert reporting directly to the firm's chief executive, rather than to site managers, and urged formal whistleblowing channels. The new recommended practices also offer guidelines on more technical aspects of the management of mine waste, called tailings.

Miners and a group of large investors hailed the new rules as a step change that brings together best practices from around the world and increases public disclosure.

The guidelines aren't binding, however, and stop short of recommending banning the type of dam that failed in Brazil. That structure, called an upstream dam, is typically cheaper to build, but critics say it is more unstable.

"This will bring a lot more standardization in the way we manage one component of our industry, which, if neglected, can deliver big disasters," said Mark Bristow, Chief Executive of Barrick Gold Corp., a member of the ICMM. Mr. Bristow said the ICMM's 27 members have agreed to follow the guidelines, while encouraging other miners to do so.

Experts hired by the Brumadinho dam's owner, Vale, concluded last December that the dam's original design and the way it was expanded over the years had allowed water to build up to such levels that it was only a matter of time before it gave way.

The Wall Street Journal first reported close ties between Vale and TÜV SÜD, the outside auditor. A Journal investigation found Vale and its inspectors were aware of dangerous conditions at the mine-waste dam months before it collapsed but that inspectors, worried about losing Vale contracts, certified the dam as safe.

Last January, Brazilian prosecutors charged Vale's former chief executive Fabio Schvartsman and 10 other company officials with homicide and leveled the same charge against five people at Germany's TÜV SÜD.

Vale said it would implement the new standards, much of which it said it had already adopted. The company has in the past denied that there were conflicts of interest and denied that it knew that the dam was dangerous.

A spokesman for TÜV SÜD denied that there was a conflict of interest and said there was no regulation in Brazil that banned companies from doing safety auditing and consulting on the same dam. The spokesman said the company's safety audit was issued along the relevant Brazilian safety standard.

Write to Alistair MacDonald at alistair.macdonald@wsj.com

 

(END) Dow Jones Newswires

August 05, 2020 10:21 ET (14:21 GMT)

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