African miners reviewing legalities around tailings dam failures – expert

Herbert Smith Freehills’ Director – Africa Group, Matthew Burnell. Photo by Paydirt 2019 Africa Downunder.

Matthew Burnell, director of international law firm Herbert Smith Freehills, said this week that following the recent catastrophic tailings dam failures in Brazil, miners operating in southern Africa have increased the fiduciary assessments of the risk integrity of their company’s exposure to dam incidents.

During a presentation at the Paydirt 2019 Africa Downunder mining conference in Perth,  Burnell said that most firms are paying close attention to the legal issues surrounding past, present and future ownership and management of mine tailings facilities.

Herbert Smith Freehills says miners operating in southern Africa have increased the fiduciary assessments of the risk integrity of their company’s exposure to dam incidents

“There is a growing consolidation of the legal, corporate and social requirements that miners can now be expected to apply to the management of tailings dams regardless of whether they are current or former dam owners,” the lawyer said. “This consolidation includes pulling together the legislative risks and possible opportunities to mitigate these risks in respect of existing and historical dams, contractual legacy claims, claims against subcontractors, what insurance provisions were or are in effect and their adequacy, indemnity agreements for directors and whether they are relevant or sufficient, and a revision and update of any existing emergency incident plans.”

According to the expert who leads the environmental practice of the firm’s Johannesburg office, there is a heightened awareness of the limitations on some financial provisions, a situation that is leading to some revision of mine closure plans.

In his view, such reviews should see better management in the case an incident took place, which means that streamlined mechanisms should be in place to notify stakeholders and activate immediate mitigation measures, long-term corrective measures for a failed dam and long-term monitoring and preventative measures.

The awareness -he said- came at a time miners in Africa and across the world are also having to come to terms with emerging risks regarding the resilience of mines to climate change. 

The year 2019 started with the catastrophic collapse of Vale’s (NYSE:VALE) Córrego do Feijão tailings dam. Heavy rains and a failed alarm system prompted the failure, which resulted in hundreds of people dead, dozens displaced and massive environmental destruction.

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