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Tailings Dams Briefing Transcript

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Welcome / Introductions

Before we get started I will draw your attention to our disclaimer.

Slide 3: The purpose of today’s session is to do a deep dive into tailings dams. We have 4 high level themes we will be covering:

  1. Introduction to tailings dams;
  2. Overview of the tailings portfolio, including our non-operated joint venture tailings facilities, and the review we undertook of dam risk following  the tragedy at Samarco;
  3. Our approach to dam risk management;
  4. The Future – our research and technology focus, how we are collaborating to drive a step change to risk reduction; and

In addition we will present a case study on our North American Closed Sites tailings portfolio.

Given the technical nature of this topic we will provide the opportunity to take questions at the end of the presentation. While we have allowed two hours for this briefing to accommodate questions, we don’t necessarily anticipate we will need the full two hours.


Slide 4: Acknowledging the varying levels of knowledge in the audience on this subject, the purpose of this section is to provide a common understanding of some basic concepts concerning tailings dams, including: what they are, types of tailings dams; factors that influence dam integrity and dam classification systems.

Slide 5: A dam is a barrier constructed to retain something – water or other substances including tailings. There are however some distinct differences between tailings dams and more conventional dams, specifically tailings dams often contain more than just liquids and are dynamic in nature (they are designed to grow over the life of a mine). Importantly also, tailings dams often are structures into perpetuity unlike water dams which may be emptied and decommissioned at the end of life.

Another important distinction with tailings dams is that they are not necessarily always sited at the end of a valley, as is typically the case with conventional dams. There are various alternative arrangements for tailings dams. For example, in areas of flat topography the dam may be constructed with multiple retaining walls from the ground up or where available, former mining pits may also be utilised for storage.

A key term to be familiar with when thinking of tailings dams is the notion of a tailings storage facility. This is the term commonly used to describe a cluster of individual tailings dams which are co-located or a single large dam. Currently there is no industry-wide agreed definition for this term. For the purposes of this presentation and Church of England disclosure, a tailings storage facility has been defined by the International Council on Mining and Metals Tailings Advisory Group as an operationally integrated facility of dams/walls. Within this presentation, we use the terms tailings storage facilities, TSFs and tailings facilities interchangeably.

Slide 6: As mentioned on the previous slide, one of the unique characteristics of tailings dams is that they are dynamic in nature and therefore their design, construction and operation needs to account for possible changes over their long life cycle. For example, during the operational phase this may include the expansion of storage volume, either through dam raises which is when the dam height is increased, or through the construction of additional dams.

Consideration also needs to be given to the closure phase of tailings facilities– often a phase that exceeds the time the dam was actually operational. The types of factors that need to be considered as a facility is transitioned from an active to an inactive phase may include how water volumes are managed, changes to tailings geochemistry and physical requirements such as minimising embankment erosion.

Ideally over time, inactive tailings facilities can transition from an active management arrangement to a passive care arrangement where ongoing water, geochemical and physical management requirements are reduced or eliminated. Ultimately the goal is to create a landform which is no longer considered a dam.

Slide 7: There are 3 principal design options for tailings dams: upstream, downstream and centerline. These design options may be applied alone or in combination. The selection of design is based on a number of factors including dam siting, geology, seismicity, climatic conditions, construction materials and the nature of the tailings.

Upstream dam construction relies on the integrity of the tailings themselves (or sands as they are sometimes called) and as such they require greater ongoing scrutiny on key operational aspects such as water management, the width of the tailings beach (the drained solids left after deposition which contribute to embankment stability) and tailings deposition (which may change if there are changes for example to the ore being processed).

In contrast, downstream dams are often constructed with rock, with subsequent raises extending outwards or downstream from the initial embankment. Centreline construction is similar, however the dam maintains a fixed centre line as subsequent raises are built. As such, one of the main advantages centerline dams have is that they do not occupy as large a footprint of land as downstream dams and can therefore be useful where there are constraints in terms of land availability.

When dams apply a combination of these methods they may be referred to as hybrid.

Slide 8: Given tailings dams are dynamic structures, maintaining dam integrity requires an ongoing focus on appropriate engineering design, quality construction, operating discipline and effective governance.

There are a range of factors which can influence dam integrity. These include:

  • Whether appropriate consideration has been given to local site conditions such as seismicity and hydrology;
  • The quality assurance and quality control that is applied to dam construction and the materials used for construction;
  • The ongoing focus on operating discipline including - the nature of the tailings themselves and how they are deposited; how water is managed; the effectiveness and analysis of monitoring and the assessment of changes during dam life.

Slide 9: Tailing dam classification systems have been introduced to ensure a level of consistency is applied to the design and management of dams to promote integrity and reduce the risk of catastrophic failure.

BHP applies two main classification systems: that of the Canadian Dam Association (CDA) and that issued by the Australian National Committee on Large Dams (ANCOLD). There are also local regulated classification systems in some regions. For the purposes of this presentation we have aligned all classifications to that of CDA.

Dam classification is generally based on the modelled impacts following a dam break study. A dam break study being an assessment of the possible impacts that may arise from the hypothetical most significant failure mode for the facility, regardless of the probability of failure or controls that may be in place to manage the risk of failure.

This doesn’t mean that highly unlikely scenarios, such as an asteroid hitting a dam, form the basis of the modelling, but it does mean that the failure mode may represent an extreme version of a credible scenario. For example this may include an extreme 1 in 10,000 year seismic event or a Probable Maximum Precipitation event, a term the industry uses to describe the theoretical, greatest rainfall possible at a particular location, based on climate models, not climate data.

The classification of the dam is typically assigned by the external Engineer of Record (a role we will discuss later).

Both CDA and ANCOLD provide design and surveillance criteria based on the dam classifications.

Dam classification informs BHP’s approach to risk management however is not the only factor. As such it is possible to have dams which could be considered material risks by the Company despite having lower dam classifications.

Slide 10: This slide provides an extract of the CDA dam classification systems. Following the completion of a dam break study of the modelled, hypothetical most significant failure mode, an external Engineer of Record would review the criteria within this table and identify the possible worst case outcome on the assumption that no controls were in place and then assign a classification. For example a modelled dam break may identify there is no population at risk and no significant environmental impacts yet it may result in high economic losses and therefore the dam would be rated as high. This classification would then inform the design and surveillance requirements for the dam.

Slide 11: Typically there is not one cause alone that contributes to a catastrophic failure of a dam. It is often like the James Reason swiss cheese model where a range of factors contribute. Tailings engineers use some common terms to describe the main failure modes of tailings dams. These include [using the diagram to highlight each]:

  • Overtopping when the contents of the dam spill over the dam wall, caused by water volumes that exceed the capacity of the dam.
  • Structural failure of materials used in dam construction (including from liquefaction, seismicity)
  • Foundation failure due to movement and/or failure of the foundation supporting the dam.
  • Surface erosion of the embankment from settlement, cracking
  • Internal erosion of the embankment - sometimes termed piping erosion
  • Deficiencies in the choice or application of design criteria (e.g. not appropriate for the setting; construction does not meet engineering requirements)

Slide 12: Since the Brumadinho dam failure, there has been a lot of commentary about the frequency and causes of tailings dam failures. We thought it would be beneficial to share some data from a paper presented in 2015 by Clint Strachan and Stephen Goodwin.

This analysis shows a decline in incidents from the 2000s onwards.

Slide 13: Moving on from our tailings dams 101, we would now like to discuss tailings facilities in the portfolio.

Slide 14: Prior to going into this data, a few key points to note. This discussion covers tailings facilities (singular or clusters of dams) for both our operated and non-operated assets. The number of tailings storage facilities is calculated based on the definition agreed by the International Council on Mining and Metals Tailings Advisory Group in response to the Church of England information request. This is a different definition to the one applied in our February 2019 disclosure which was based mainly on operational management distinctions as determine by our responsible dam engineers.

The classifications discussed have all been aligned to the CDA classification system for simplicity. It is important to again note that the classification is based on the modelled, hypothetical most significant failure mode possible without controls – NOT on the current physical stability of the dam. It is also important to note that it is possible for dam classifications to change over time due to factors such as changes to the operating context of a dam. As such this represents the current status of the portfolio.

In total, BHP has 67 operated tailings facilities, 29 of which are of upstream design. We have 5 operated facilities that are classified as extreme and a further 15 operated facilities classified as very high. These will be discussed in more detail on a later slide.

13 of our operated facilities are active – i.e. currently accepting tailings. The more substantive inactive portfolio is due in large part to a number of historic tailings facilities associated with our North American Closed Sites Portfolio.

We also have two tailings storage facilities which are not considered dams and are not subject to classification. Hamburgo TSF at Escondida is an inactive facility where tailings were deposited into a natural depression. Island Copper TSF in Canada, acquired in the 1980s, is also an inactive facility. Here, tailings were deposited in the ocean under an approved license and environmental impact assessment. This historic practice ceased in the 1990s. Since, BHP has committed to not dispose of mine waste rock or tailings in river or marine environments.

Slide 15: This slide illustrates the geographic distribution of our operated tailings facilities.

The majority of our active facilities are in Australia, with one other being at Escondida in Chile.

We have 5 operational upstream tailings facilities – all located in Australia: WAIO (1 at Whaleback), Olympic Dam (2) and Nickel West (2). We have four hybrid facilities at our coal operations that comprise a combination of construction techniques including upstream components.

We have 24 inactive or closed upstream tailings facilities, 20 at our closed sites in North America and 4 in Australia (Nickel West (2), Olympic Dam and WAIO (Boodarie)).

Slide 16: This slide summarises the 9 tailings facilities associated with our non-operated joint ventures. All of the non-operated facilities are located in the Americas.

There are 2 active tailings facilities. Antamina which is of downstream / centreline construction and Cantor TSF at Cerrejon which is of downstream construction. In addition there are 7 inactive facilities. These include two upstream facilities at Samarco (Germano) which are in the process of decommissioning following the new rulings on upstream dams in Brazil, 3 upstream inactive facilities and 1 inactive modified centreline facility at Resolution Copper and one downstream inactive facility at Bullmoose in Canada.

The highest classification facilities rated as extreme, are the downstream facility at Antamina in Peru and the upstream Germano facilities at Samarco in Brazil.

Slide 17: BHP’s highest classification operated and non-operated facilities are summarised on this slide. As previously mentioned, it is important to note that classification is based on the modelled, hypothetical most significant failure mode without controls, NOT on the current physical stability of the dam.

As can be seen, the classification of these facilities is driven by a range of factors. Within our operated sites active facilities, the extreme classification facilities are located at Olympic Dam and Mt Whaleback (Western Australia Iron Ore). The classification at both these locations is driven by potential impacts to nearby employees. The non-operated Antamina facility extreme classification is driven by potential community impacts. The remaining facilities that are classified as extreme are inactive. They include the non-operated Germano facilities at Samarco and Miami Avenue TSF located at Miami Unit in Arizona within our North American Closed Sites Portfolio.

We have a range of controls to manage the risks associated with tailings facilities. These comprise a strong focus on dam integrity, governance, monitoring, surveillance, review and emergency response as we will now discuss.

Slide 18: Our Dam Risk Review was undertaken following the failure of the Fundao dam at Samarco to assess the management of tailings storage facilities across the business. This Review was in addition to any existing assurance activities already being undertaken by our operations.

The Review assessed dam design, construction, operations, emergency response and governance to determine the current level of risk and the adequacy and effectiveness of controls.

The scope of the review included three areas:
Significant tailings facilities (which were determined as part of the review process) including active and inactive facilities and operated and non-operated assets;
Any proposed significant tailings or water dams as part of major capital projects; and
Consideration of health, safety, environment, community and financial impacts associated with failure, including the physical impacts of climate change.

The Review was undertaken by multi-disciplinary expert teams, combining leading tailings engineering firms and BHP personnel.

Slide 19: The overall outcome of the Review was that there were no immediate concerns regarding dam integrity. Subsequently we have undertaken Dam Safety Reviews which provide assurance statements by external engineers on dam integrity. We will discuss Dam Safety Reviews further later.

It is important to note that tailings dams are dynamic structures and maintaining dam integrity requires ongoing focus on appropriate engineering design, quality construction, operating discipline and effective governance processes to ensure risk controls are effectively implemented and maintained.

Slide 20: Arising from the Dam Risk Review were two sets of actions – Asset or site level actions and some higher-level, corporate actions that we refer to as Group Level Actions.

The Asset-level actions consisted of some very site specific actions plus 6 common themes which are shown on this slide.  I won’t read through them.

In total over 400 actions were assigned. To date, as self-assessed by our business over 93 per cent of these actions are complete. The remaining open actions being progressed are items with longer lead times such as studies to assess the impacts of climate change. Complementing this process, our Internal Audit and Assurance function have also been reviewing these actions.

Slide 21: At a Group level the actions outlined on this slide have been progressed.

The outcomes of the dam risk review set the course for BHP’s revised approach to dam risk management which we will now discuss.

Slide 22: Effective risk management is a key business process for BHP and central to our management of tailings storage facilities.

Slide 23: As noted earlier, tailings dams are dynamic structures and maintaining dam integrity requires appropriate engineering design, quality construction, ongoing operating discipline and effective governance processes.

BHP’s revised approach to dam risk management is highlighted on this slide.

I will now talk to each of these elements in further detail.

Slide 24:  We cannot emphasise enough that dam integrity is an ongoing process of continuous assessment that needs to be maintained for the life (and into closure) of a tailings facility.

Critical components to maintaining dam integrity include the five dimensions shown on this slide.

Slide 25: Effective dam governance is central to enabling technical dam integrity. Effective governance encompasses a range of aspects from change management to document management to appropriately qualified personnel with clear accountabilities.

To the latter point, a key outcome from the Dam Risk Review was clarifying and appointing accountabilities for our tailings facilities – three key roles were identified including:

  • Dam Owner – the single point of accountability for maintaining effective governance and integrity of the dam(s) throughout its life-cycle.
  • Responsible Dam Engineer - a suitably qualified BHP individual accountable for maintaining overall engineering stewardship of the facility including planning, operation, maintenance and surveillance
  • Engineer of Record - an independent, suitably qualified professional engineer retained by the Dam Owner for the purpose of maintaining dam design and certifying dam integrity. The Engineer of Record is generally a more experienced engineer who also supports the Dam Owner and the Responsible Dam Engineer on any other matters of a technical nature.

Slide 26: Given tailings dams are dynamic structures, effective monitoring, surveillance and review is central to ongoing dam integrity and governance. These processes span six dimensions with specific details aligned to the significance of the facility:

  1. Monitoring systems – operating in real time or periodically;
  2. Routine surveillance –undertaken by operators;
  3. Dam inspections –more detailed inspections undertaken periodically by the Responsible Dam Engineer;
  4. Dam Safety inspections – annual inspections undertaken by the Engineer of Record reviewing aspects across both dam integrity and governance;
  5. Dam Safety Reviews – a significant effort which we will go through shortly; and
  6. Tailings Review or Stewardship Boards – a panel of qualified independent individuals established, commensurate with dam significance, under specific terms of reference to review aspects such as the current status of the dam; any proposed design changes and outcomes of any inspections or dam safety reviews.

Slide 27: Dam Safety Reviews were mandated across all our significant Tailings Storage Facilities following our 2016 Dam Risk Review. We undertake Dam Safety Reviews consistent with the guidance provided by the Canadian Dam Association 2016 Technical Bulletin on Dam Safety Reviews, considered the most rigourous process in the industry.

Dam Safety Reviews are detailed processes as shown on this slide. They include a review of the dam break assessment and dam consequence classification.

The initial review can be quite a lengthy process depending on the quality and extent of records and data required to support the review.

The review is led by an external Qualified Professional Engineer, who has the appropriate level of education, training and experience, with support and input from other technical specialists from fields which may include, for example, hydrology, geochemistry, seismicity, geotechnical or mechanical. An assurance statement is provided at the end of the process as to the integrity of the dam.

Slide 28: The final key element in our approach to dam risk management is emergency preparedness and response.

We take a systematic approach to emergency response preparedness and planning. Testing and training is an important element of this. Our approach varies commensurate with facility risk and may range from desk top drills to full-scale simulations.

Slide 29: Now, to talk to the future.

Slide 30: Prior to Brumadinho we already had a significant focus on looking at how we could deliver a step change reduction in tailings risk. Brumadinho however has further strengthened our resolve to collaborate to eliminate tailings risk from our sector.

In recognition of this, BHP has now established a Tailings Taskforce. The Taskforce will be accountable for further enhancing our focus on tailings including the continued improvement and assurance for BHP’s global tailings storage facilities, progressing our technology efforts and leading ongoing participation in the setting of new international tailings management standards.

Slide 31: The BHP Tailings Technology Strategy has been developed through a multi-disciplinary team from the BHP Resource Engineering Centre of Excellence and BHP Technology groups.

The central thrust is to make an accelerated step change reduction in failure risk while seeking to harness other benefits including enhanced water recovery, reduced disturbance footprint and reduced closure liability. Opportunities to minimise energy and greenhouse gas intensity are also part of the considerations.

Our approach seeks to identify the array of technology options, then through collaborations explore and share the options, their viability and suitability.

Slide 32: There is a range of work already underway within the strategy with additional opportunities being considered across the identified work streams.

For example, mechanical dewatering has been occurring since 2014 at our Caval Ridge Metallurgical Coal mine in Queensland Australia. The tailings or fine waste stream generated from the Coal Handling and Processing Plant is dewatered through a belt press filtration plant to generate a dry tailings cake.

The dry tailings cake is then blended with coarse rejects from the Coal Handling Preparation Plant and transported by the haulage fleet for co-mingled disposal in the mine waste dump areas. Eliminating the need for a tailings facility.

Slide 33: BHP also co-funds a range of industry research partnerships. Some of these are outlined on this slide, but I won’t go into them in the interests of time.

Slide 34: You are probably aware that, in the aftermath of Brumadinho, the ICMM, the Principles for Responsible Investment and the United Nations Environment Programme have agreed to lead a review to establish an international standard for the safe management of tailings storage facilities.

BHP is fully supportive of this initiative and has been a driving force behind it.

A report is expected by the end of this calendar year.

Slide 35: We would now like to share a case study of closed sites tailings facilities to give you some further insights into a significant component of our tailings portfolio.

Slide 36: Our North American Closed Sites portfolio consists of 32 Tailings Storage Facilities distributed across locations within the US (Arizona, California, New Mexico, and Utah) and Canada (British Columbia, Nova Scotia, Ontario and Quebec).  All the facilities are inactive and range in age from 1880s (Old Dominion) to 1990s (Elliot Lake). Many of the structures have been inactive for 30 plus years.

Slide 37: Our Closed Sites account for over half of BHP’s very high and extreme classified tailings facilities. Given these facilities are inactive, their most probable failure modes generally arise from environmental factors including extreme precipitation and extreme seismic events. The dam classifications driven by the modelled most significant, possible failure scenarios without controls within the closed sites portfolio cover a range of potential impact triggers from community to environmental.

Slide 38: Consistent with the accountabilities we discussed previously, the North Americans Closed Sites team have appointed both internal and external personnel for the governance of their tailings facilities.

These include dam owners (with overall accountability); external, dedicated Engineers of Record who provide technical advice and undertake the annual safety inspections; an internal geotechnical team comprising qualified responsible engineers providing technical support and dam risk control owners who undertake the more frequent monitoring, surveillance and maintenance tasks. There are Engineers of Record and Dam Control Owners for each site.

Slide 39: Dam Safety Reviews have been completed for the majority of the closed sites tailings facilities, with a few still in progress.

Unique to our Closed sites, given the age of some of the facilities, some of the reviews have taken over 3 years to complete. This is due to the need to undertake additional studies to complete records so that appropriate engineering analyses can be undertaken.

The outcomes of the Dam Safety Reviews to date have not identified any deficiencies which have safety implications.

Slide 40: We would next like to share an example of an emergency response drill undertaken at Elliot Lake. This involved a two-step process so that the community could be engaged, aware and available to participate.

The first step involved a community emergency planning workshop so that BHP’s emergency planning process and the emergency scenario could be introduced to and discussed with the community of Elliot Lake.

The second step was the emergency drill itself. The emergency scenario tested was one that would arise from a hypothetical, worst case internal erosion or high seismic event. The scenario involved a failure at the Stanleigh tailings facility causing the washout of a public road, impacts to a Garden Centre – both of which could involve a population at risk – and discharge into Elliot Lake ultimately resulting in potential impacts to the drinking water supply for the City of Elliot Lake.

The drill involved a range of external agencies and provided a successful demonstration of response under this scenario. Lessons learned have been captured to improve preparedness into the future.

That marks the end of our presentation.

In closing, as we noted earlier, prior to Brumadinho we already had a significant focus on looking at how we could deliver a step change reduction in tailings risk. The tragedy at Brumadinho however has further strengthened our resolve to eliminate tailings risk from our sector. We look forward to working with others and sharing our progress to make this a reality.