Proposed Risk Management Policy for Mine Operations
Michael Burnside
February 15, 2008
The perception of risk that a mine project might pose to the environment is the biggest
weapon opponents use to rally public and political opposition to mines. Thus risk is also
the single biggest roadblock to mine permitting and NEPA analysis completion. Risk is
defined by engineers as the probability of a project design failure multiplied times the
consequences of that failure. A project has a major risk problem when the public or an
agency is convinced a mine design has a high or unknown probability of failure that will
cause major environmental consequences.
Mine opponents use the "precautionary principle" to magnify perceptions of risk and to
support their argument: "Any serious risks to the environment are unacceptable. All
mine projects pose serious risks to the environment. Therefore all mine projects are
unacceptable and must be banned or heavily regulated." This badly skewed and overly
cautious approach to risk is providing much of the rationale for many of the worst
measures of HR 2262, the Rahall mining law bill, such as the mine veto, suitability
criteria, environmental standards, bonding, etc.
It is not easy to correct this distorted perception of mining project risk. But one way to
do it is for the mining industry to embrace and "own" the issue of risk. How do we
"own" risk? As the following explains, we could start by adopting a "risk management"
policy as part of our environmental policy statement.
We should consider a risk policy that states as an integral part of designing and
submitting our major mining proposals (that is, those at the development stage), the
operator will conduct an engineering risk-based analysis of the development project. The
risk analysis process should be an accepted one such as the Failure Modes Effects
Analysis process for risk, which has already been widely used and accepted for major
projects including some by the U.S. military, USDA, Ford Motor Company, chemical
industry, hydroelectric and nuclear industries as well as for some major mine proposals in
the US and Canada.
Objectives of a mining risk management policy and process: To scientifically
characterize a mining project's risks and demonstrate how those risks would be managed,
the process would:
1. Analyze a project for "fatal flaws", ie, the probability of failure and resulting
environmental consequences of each mining project component and subcomponent (see example from New World Mine risk review chart);
2. Identify the design and monitoring procedures that would manage and reduce
each of those risks to an acceptable level
3. Enable risk comparisons with similar other non-mining engineering projects (see,
for example, the attached Whitman Chart, of accepted non-mining project risks).
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4. Provide the permitting agency with a detailed scientific analysis and management
of the project's risks, which will facilitate the NEPA & permitting process.
5. Provide a basis to reassure the public and respond to early erroneous perceptions
of the project's risk.
Summary:
An engineering-based risk management analysis process:
 has been successfully developed and used in numerous major engineering
projects, including mining projects in the US and Canada (see attached paper by
McLeod on Risk Management);
 tracks risk through design, construction, and operation phases and is compatible
with "adaptive management" processes;
 identifies, quantifies, and manages risk, plus assesses risk management
effectiveness;
 provides a basis to compare mining project risk to other non-mining projects.
 provide a basis to reassure the public and respond to early erroneous perceptions
of the project risks
 provide permitting agencies with a detailed scientific analysis and proposed
management of the project's risks, which will facilitate the permitting process.
Conclusion:
A mining industry risk management policy would
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Accept a major recommendation of the American Society of Civil Engineering to
incorporate scientific risk management into project design and development (see
attached ASCE statement).
Show the industry has heard and is responding to the public's concerns about mine
projects' perceived risks to the environment.
Thus it is implementing a policy of "full disclosure" in project design to insure the
risks are analyzed, disclosed, and managed, and will produce a well designed and
operated project.
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Figure 5 Risk Review Chart - New World Project Proposed Tailings Facility
Figure 6 Risk Review Chart – New World Project Proposed Tailings Facility
After Compensating Factors Applied.
Whitman Chart of Risks From Major Industrial Facilities, by Robert Whitman,
MIT professor of engineering.
McLeod, et. al., Risk Management Analyses
American Society of Civil Engineers Risk Management Policy Statement, July
15, 2007.
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