By Eugene Kasao
In recent years, the Tanzanian mining industry has grappled with a pressing issue that not only raises environmental concerns but also jeopardizes the reputation and operations of mining companies due to failures of tailings storage facilities (TSFs). Tailings storage facilities (TSFs) are engineered structures including embankment dams, designed to store and manage the fine-grained waste material, known as mine tailings, generated from ore processing plants or coal preparation plants along with associated water. Incidents in TSFs, including the breach at a Diamond Mine in November 2022 and the production ban faced by a Gold Mine in Mara region in 2019 due to water seepage, underscore the need for effective risk management and regular audits of TSFs.
The regulatory landscape in Tanzania plays a pivotal role in overseeing the safe construction and operation of TSFs. The Mining Commission (MC), in collaboration with the Ministry responsible for Water and the National Environment Management Council (NEMC), ensures that tailings produced from mineral processing are deposited in designated facilities known as TSFs. Approval from the Chief Inspector of Mines, under the MC, is mandatory for the construction and operation of these facilities. In the 2018/19 review, nine sites secured approvals for both constructing and operating Tailings Storage Facilities. In the subsequent year, 2019/20, the Mining Commission inspected ten mine sites, resulting in six sites obtaining permits for construction, three for operation and one for both. Moving into 2020/21, the Mining Commission inspected 26 TSFs across various regions, aiming to verify information for permit approvals. Notably, the rise in new TSF approvals makes the question of risk associated with potential TSF breaches even more pertinent. Therefore, ensuring sustainable mining practices in Tanzania is an imperative to mitigate environmental and safety risks that come with increased TSFs construction and operation.
Challenges persist, as observed during the inspection of ten existing TSFs in the financial year 2019/20. The government, through NEMC, noted environmental pollution issues caused by a TSF leakage at the Gold Mine in Mara. To address this, an Environmental Stop Order was imposed, resulting in a fine of TZS 5 billion for environmental pollution. The mine was instructed to construct a new TSF while implementing temporary measures to reduce excess water.
The environmental challenges from the TSF breaches not only have significant consequences for the government and the mine itself; they also reverberate across the spectrum of stakeholders, including potential investors with a focus on environmentally sustainable practices. Green investors, who prioritize environmentally responsible businesses, are likely to be deterred by incidents of environmental pollution and breaches in tailing storage facilities. Such events can tarnish company’s reputation, erode investor confidence, hence detrimental to green investments. The affected mining firms may face difficulties attracting capital from environmentally conscious investors, hindering their ability to fund sustainable and responsible mining practices.
Furthermore, sourcing debt finance from institutions that prioritize environmental sustainability may become a formidable challenge for those firms. Institutions that follow strict environmental and social governance standards may hesitate to extend financial support to a company with history of environmental pollution.
The temporary ban on production while the new TSF is being commissioned can lead to significant revenue losses and operational disruptions for the mining company. This interruption in production not only affects the company’s financial performance but also has broader economic implications for local communities that rely on the mining industry for employment and economic opportunities. The ripple effect of production halts can extend to suppliers, service providers, and other businesses connected to the mining operation, amplifying the economic strain on the region.
Moreover, the repercussions extend beyond the financial realm. Tailing storage facility breaches can pose severe threats to the environment and public health, with potential contamination of water sources and agricultural lands. Communities residing near the affected areas may experience adverse health effects due to exposure to pollutants, disruption of livelihoods, and damage to ecosystems. The social and economic fabric of these communities is further strained as they grapple with the aftermath of environmental incidents, creating long-lasting challenges on their well-being and development. It underscores the importance of stringent environmental regulations and proactive measures to prevent and mitigate the impact of TSF breaches for the sake of both sustainable business practices and community welfare.
In the pursuit of sustainable mining practices, the responsibility extends to the closure of mines in an environmentally and socio-economically sound manner. The National Mine Closure Committee (NMCC), chaired by the Chief Inspector of Mines under the MC, reviews and approves Mine Closure Plans (MCP) submitted by all mining license holders. The MCPs aim to ensure that mine closures are conducted in a manner that minimizes adverse impacts on the environment.
Amid these challenges, the Global Industry Standard on Tailings Management (GISTM) emerges as a beacon of hope. Directed at ‘operators,’ the standard sets a firm stance that extreme consequences from catastrophic tailings facility failures are unacceptable. It outlines specified measures for operators to prevent such failures and emphasizes best practices in planning, design, construction, operation, maintenance, monitoring, closure, and post-closure activities.
GISTM is organized into six topic areas, 15 principles, and 77 auditable requirements. It focuses on respecting the rights of project-affected people, emphasizing human rights due diligence processes and meaningful engagement. It also requires operators to develop a comprehensive knowledge base about the social, environmental, and local economic context of proposed or existing tailings facilities.
GISTM aims to elevate the performance bar by emphasizing the ongoing use of updated knowledge, alternative tailings technologies, robust designs, and well-managed construction and operation processes. It also delves into the ongoing management and governance of tailings facilities, stressing the importance of key roles, standards for critical systems, and a learning organizational culture.
Emergency preparedness and response takes a centre stage in GISTM requirements, urging operators to avoid complacency, consider their capacity in conjunction with other parties, and collaborate with communities for the unlikely case of a failure. Finally, it mandates public disclosure of information about tailings facilities to support public accountability while protecting operators from disclosing confidential information.
In conclusion, the journey towards sustainable mining practices in Tanzania necessitates a comprehensive approach. The integration of global standards, regulatory oversight, and proactive measures by mining operators can collectively pave the way for responsible and environmentally conscious mining operations, reducing the risk of catastrophic tailings facility failures. The lessons learned from past incidents should serve as a catalyst for industry-wide awareness and commitment to ensuring the long-term sustainability of Tanzania’s mining sector.
Eugene Kasao is a Senior Audit Associate with KPMG in Tanzania ([email protected]). The views and opinions are those of the author and do not necessarily represent the views and opinions of KPMG.