Approach

TSFs are dynamic structures that are designed and managed to contain tailings produced by mining operations. They can comprise of multiple dams (or cells) that have contiguous, structurally similar interconnected walls or can be in-pit facilities or dry stack facilities. Ensuring the safety of TSFs requires consideration of a range of factors including appropriate engineering design, quality construction, ongoing operating discipline, maintenance and effective governance processes. Our approach to effective management of TSF failure risk is detailed in the below section on TSF failure risk management.

Following the tragic failure of the Fundão dam at Samarco in 2015, the BHP Board and senior management initiated a Dam Risk Review to assess the management of major TSFs. This review covered both active and inactive facilities across our operated and non-operated assets in addition to existing review processes already being undertaken by our operated assets. Reviews were conducted by a combination of external tailings experts and BHP personnel who assessed dam design, construction, operations, emergency response and governance to determine the then current level of risk and the adequacy and effectiveness of controls.

The scope included:

• prioritised TSFs across all our operated assets and non-operated assets based on Canadian Dam Association (CDA) consequence classification
• any proposed prioritised tailings or water dams as part of our major capital projects
• consideration of health, safety, environmental, community and financial impacts associated with the potential failure of those facilities including the potential physical impacts of climate change on them

Improvement actions were assigned to address facility-specific findings. Our Internal Audit team subsequently assessed the quality and completeness of the improvement actions. These actions resulted in enhancements across our assets, such as buttressing of selected dam walls and installation of additional instrumentation to monitor dam integrity.

Since that time we have undertaken dam safety reviews, and continue to do so, which provide external assurance statements on dam integrity.

Improvement actions were also identified to address common findings and lessons learned across the Group so that our approach to TSF risk management could be further improved. As part of this, a central technical team was set up to enhance governance, oversight and assurance.

Prior to the tragic collapse of the Brumadinho dam at Vale’s iron ore operation in Brazil in January 2019, we were already focussed on delivering a step-change reduction in TSF failure risk. Together with our peers across the resource sector, the Brumadinho event further strengthened and accelerated our resolve to reduce those risks by sharing and implementing leading practice.

Overview of our journey to date

In FY2019, we introduced mandatory minimum performance requirements for TSFs that govern how we manage TSF failure risks across BHP and outlined applicable processes, including business planning, risk assessments, and management of change. Our mandatory minimum performance requirements require us to take a risk-based approach and set out key considerations in relation to the management of TSF failure risks, such as working with local communities and external stakeholders and building our emergency management plans. We have updated our mandatory minimum performance requirements for TSFs and associated internal guidance to align with the Global Industry Standard on Tailings Management (GISTM).

In FY2019, we introduced a further second line review of prioritised TSF failure risks to provide greater oversight and assurance and enhance our ability to identify any opportunities to improve the management of these risks. By the end of FY2021 these reviews were completed for all of BHP’s prioritised sites. Key risk indicators (KRIs) have been set by management to help monitor performance against target thresholds, including KRIs that monitor data relating to dam integrity and design, overtopping/flood management and emergency response planning. Our approach to TSF risk management is detailed in the Tailings Storage Facilities Management webpage.

For more information on our Risk Framework, which applies to all risks to which BHP is exposed (including those associated with TSFs), refer to our Operating and Financial Review 9 – How we manage risk. 

As well as applying a comprehensive tailings governance plan for our operated assets, in CY2019 we created a Tailings Taskforce (TTF) team reporting to the Executive Leadership Team and the Board’s Sustainability Committee. In FY2021, the importance of the mandate of the TTF was recognised and the team has since been permanently embedded into the company structure. The new Tailings Excellence team continues the work of the TTF and is accountable for further developing, accelerating and embedding our short-, medium- and long-term strategies in relation to the management of TSFs. The Tailings Excellence team lead the continued improvement and assurance of our operated TSFs, progressing the development of technology to improve tailings management storage, and working towards implementation and conformance with the GISTM. 

In FY2022, we continued to progress work on TSF failure risk management with a focus on the delivery of the risk remediation plans completed in FY2021. These plans are in addition to the range of ongoing governance activities we have in place that are designed to support effective management of TSF failure risk. 

We are committed to sustaining these strategies, continuing to review our approach to tailings management and continuing to consider and support existing and new industry guidance, standards and regulation that would improve the management of TSF failure risk. 

Tailings storage facilities

• BHP has 71 TSFs at our operated assets. 
• 15 operated facilities are active, 13 of which are in Australia and two in Chile. 
• At our non-operated joint ventures (NOJVs), there are 10 facilities.

For more information refer to the Operating and Financial Review 7.18 – Tailings storage facilities. 

Note: The number of TSFs is based on the definition outlined in the GISTM. Since our Church of England submission in FY2019, there was an increase of three TSFs in FY2020 when the BHP TSF definition was updated and an additional two in FY2021 when this was aligned with the GISTM TSF definition following the release of the global standard. We keep this definition under review. The FY2022 changes to the TSF portfolio are due to operational factors and not due to the update of the TSF definition. Two TSFs have been removed from the operated TSF portfolio following the divestment of the BMC asset and one new TSF, a low consequence, upstream facility, became active at Olympic Dam. Similarly, two NOJV TSFs at Cerrejón in Colombia have been removed from the TSF portfolio following the sale of our interest in this asset this year.