Brazil: Tailings dams fall-out has international repercussions

Published by MAC on 2016-01-14
Source: Jacobin, Skytruth, Mongabay

Déjà Vu All Over Again: Tailings Dam Failures at Metal Mines Around the World

It has been another catastrophic year for mining disasters around the world – demonstrating once again that mining industry promises are not to be trusted…

Skytruth

25 December 2015

Catastrophic mine spills have been in the news frequently enough that we are devoting a few articles to cover some of the problems plaguing existing mines and posing serious concerns for new and proposed mines like Pebble in Alaska, Red Chris in British Columbia, and NorthMet in Minnesota. In this post we’re only covering impoundment failures from metal mines and ore processing facilities (we’ll get to coal slurry and coal ash later, and we’ve already written about abandoned and inactive mines).

The litany of mine impoundment disasters around the world is a grim one. This year saw the Fundão tailings dam failure that killed at least 13 downstream of the Samarco iron mine in Minas Gerais, Brazil.

In August 2014 it was a 24,400,000 cubic meter spill from the Mt. Polley gold mine in British Columbia, Canada into the headwaters of the Fraser River (below) only a few weeks before a run of salmon would make their way upstream. However, on Dec.17, 2015, the provincial government announced there would be no criminal charges or fines assessed against Imperial Metals for the disaster. Al Hoffman, British Columbia’s chief inspector of mines stated, “Although there were poor practices, there were no non-compliances we could find.”

If a mine can discharge 10 million cubic meters of polluted water and toxic mine waste into the environment, turning a quiet stream into a moonscape, and yet not have broken any rules, one must wonder if the rules and/or regulators are up to the task.

Looking further back to 2010, a tailings dam failed at an alumina plant in Hungary, killing 10, injuring 150, and turning the “blue” Danube River a sickly, toxic red. A slight silver-lining, however, is that the downstream town of Devecser has risen from the sludge to become a model of green living and sustainable energy.

Unfortunately, this list only recounts some of the more notorious disasters that reached the international press. For a more complete record of significant mine tailings dam failures, the World Information Service on Energy has complied a list of over 80 major non-coal spills since the 1960’s.

Yet every time a new mine is proposed, even when the dam would be taller than the Washington Monument, we are reassured that this time we have the technology right, this time the dam won’t fail, and this time the environment will be left just as it was before we mined it. There are techniques, such “dry-stacking“, which are safer than conventional wet-tailings impoundments, but they are also more expensive.

So unless the public and regulators demand that mines employ better practices, it seems we will have to keep reliving this story, year after year.

---

Story of a Disaster Foretold

What the worst environmental disaster in Brazilian history tells us about the real cost of privatization.

by Ian Steinman

Jacobin

2 January 2016

On November 5, a dam used as a waste dump owned by the mining company Samarco broke, causing a flood of toxic mud and water which killed twelve, injured many more, and completely destroyed the nearby town of Bento Rodriguez in Brazil. The waste from the spill has gone on to poison the Rio Doce, a major river linking the interior of Brazil’s Minas Gerais State to the eastern coast of Espirito Santo.

60 million cubic meters of waste water has choked off life in and around the river. More than a quarter of a million people have been left without usable water. Entire communities, towns, and cities spread along the Rio Doce and in the waters nearby find their livelihoods and futures threatened.

The exact causes of the breach are still under investigation, however recently released information points towards a construction project that was meant to connect the dam with another nearby dam, quintupling the size of the facility. Samarco has maintained that the waters have not been contaminated with toxic material and that it represents no threat to people or the environment. The government has largely supported those claims.

Nevertheless a recent test showed levels of arsenic and mercury over ten times the legal limit. The United Nation’s Office of the High Commissioner for Human Rights has also criticized the reports by Samarco and has declared the company’s and the federal government´s responses so far to be inadequate.

While the true scale of the disaster is still unknown, the devastating effects will be felt for years to come. Responsibility for this disaster lies not only with Samarco but also the destructive economic trends of the last few decades, the privatization of Samarco’s co-owner Vale, and widespread collusion between the ruling political class and mining corporations.

A Global Trend Towards Disaster

The disaster comes in the middle of a major economic crisis in Brazil which acutely affected the mining industry. The global drop in the value of raw resources like iron has contributed to Brazil’s economic downturn.

Mining companies have responded to the crisis by laying off workers and focusing on cost-cutting measures. 2,097 workers in the mining industry of the state of Minas Gerais were fired in the first semester of 2015. In Espirito Santo, one of the states through which the Rio Doce passes on the way to the coast, Samarco’s parent company Vale fired more than four thousand workers.

While Samarco maintains that the dams passed a government inspection in July and were considered safe, the method they are using to deposit waste in dammed local waters is a cheap — and risky — solution. In Chile, where earthquakes are a consistent threat, many mining companies rely on dry storage techniques which cost ten times as much.

The construction of water-based storage areas from scratch on virgin land would also be safer but cost twice as much. This is nothing compared to the death, displacement, and devastation visiting the environment and communities along the river. Yet for a capitalist business, especially under recessionary pressures, the cheapest method possible will always prevail.

This kind of disaster is not exclusive to Brazil and the developing world. It is in fact part of a global trend in the mining industry towards more and more catastrophic failures of water-based waste storage techniques. A report by Lindsay Bowker and David Chambers shows a growing trend towards more “serious” and “very serious” failures starting in the sixties and increasing up to the present.

When companies refuse to opt for costly overhauls, safer storage techniques, and repairs they turn towards makeshift solutions which often expand the storage dumps far beyond their originally intended and designed limits. Targeting the industry’s financial markets and investment trends, the report concludes that there is “a clear and irrefutable relationship between the mega trends that squeeze cash flows for all miners at all locations, and this indisputably clear trend toward failures of ever greater environmental consequence.”

The crisis of waste dump failures looks much like the general crisis of capitalist investment in production. It is not profitable to invest in major overhauls, safe storage techniques, or new, more technically advanced mines.

Facing the crisis of over-production triggered by the fall in global ore prices, private companies are attempting to cut costs, raise productivity, and extract as much as possible from existing mining facilities. Yet pushing extraction to the breaking point has dire consequences for entire communities, regions, and ecosystems.

The costs of cleanup and long-term economic and environmental damage are never fully borne by the company — often itself a subsidiary used by larger corporations to evade liability — but instead are passed on to local and national governments.

In Brazil this is exacerbated as the costs of adopting safety measures or even operating legally often far outweigh the token fines imposed on companies which violate the law. Fees imposed on Samarco are so far some of the largest but still fall far short of the overwhelming economic, environmental, and human cost of this man-made disaster.

Vale was once a national mining company and seen as central to the development of the Brazilian economy and national independence. But the state company was privatized in 1997 under the neoliberal administration of Fernando Henrique Cardoso in a sale widely considered to have substantially undervalued the company.

Its $3.14 billion price tag glaringly omitted the value of its patents, mineral rights, reserves, and stock in other companies. Though it accounted for infrastructure, many mines were still missing from the assessment. On the day the sale was finalized thousands of protesters clashed with police in front of the headquarters in Rio de Janeiro with similar protests across Brazil.

Today the company has an estimated value of over $53 billion and has established itself as a global multinational with a reputation to match. Behind the illusion of South-South solidarity the international operations of the company are just as bad as and often even worse than the practices of European and American multinationals.

Samarco, the company formally responsible for the disaster, is itself is a joint venture owned by Vale and the Anglo-Australian multinational BHP Bilton.

The PT’s Complicity

While Vale may have been privatized under the neoliberal leadership of Cardoso and the right-wing PSDB the new owners of the company quickly found willing partners in the Workers Party of former President Lula da Silva and current President Dilma Rousseff. Legal efforts to challenge the privatization over irregularities in the sale received no support from the PT, who instead embraced Vale, the mining industry, and the banks that own and finance much of industry.

In 2014 alone Vale invested r$8.25 million in the electoral campaigns of the PT and r$23.55 million to the PMDB — a PT ally which controls the Ministry of Mines and Energy as well as the National Department of Mineral Production. Dilma Rousseff’s reelection campaign counted on r$14 million in donations from Vale – far outstripping the r$2.7 million that went to right-wing opposition candidate Aecio Neves — as well as another r$14 million from a variety of other mining companies.

One of the largest stockholders in the privatized Vale is Bradesco Bank. Joaquim Levy, Rousseff’s main economic minister and architect of recently implemented austerity programs, formerly worked as a director for Bradesco. Bradesco recorded record profits of r$4.47 billion in the second trimester of 2015, an 18 percent growth compared to the previous year. The banking sector as a whole has seen unprecedented growth and rates of profit under the PT’s administration and has been a willing partner of the government.

In Minas Gerais, the disaster’s epicenter, the PT’s Fernando Pimental is serving as governor. Far from using the crisis as an opportunity to impose tougher regulations, he and the PT legislatures have instead rushed a bill once championed by the PSDB’s Aecio Neves that speeds up environmental licensing for mining companies. What emerges at the state and national level is a web of complicity and support in which the PT has often been Vale’s party of choice to ensure its economic interests are defended.

Additionally, under pressure from the economic crisis and deeply affected by the corruption scandals, there is now a major proposal to privatize huge sections of Petrobras, the Brazilian state oil company. Petrobras has been moving forward with a plan to sell $15 billion in assets by the end of this year with more sales to come in 2016 and beyond. The estimated cost of the Lava Jato corruption scandal has been as much as $6 billion and along with the fall in oil prices has left the company heavily indebted and facing a serious crisis.

Workers at Petrobras have attempted to resist this trend towards privatization. Petrobras workers recently ended one of the largest strikes in recent history in which workers in many locals occupied platforms and workplaces as well as defied the union bureaucracy’s attempts to end the strike early. Opposition to the privatization plan was a major demand of the strike and a source of rank-and-file disillusionment with the PT government.

However, the main trade union responsible for representing Petrobras workers is deeply linked to the PT and Petrobas management. The discontent expressed in the strike was substantial but still far short of the kind of mass workers movement which would be needed to block the proposed assets sale.

The threat of both ongoing and future privatization represents not only a major issue for Petrobras workers but potentially poses a substantial environmental threat. If privatized sectors of the oil and gas industry follow the same path as Vale the likely consequence will be even more environmental disasters.

Fighting Back

The disaster shows the irreparable damage which capitalist businesses wreck upon the environment and the growing trends across the mining industry towards ever more risky and damaging techniques. Corporate models in environmentally risky industries like mining socialize the dire risks of extraction while privatizing the financial benefits.

Yet while defending state ownership is important, it is far from enough. The crisis of Petrobras and its growing trend towards privatization has itself been driven by the looting of its assets by the governing PT party and its allies. The ability of the ruling and allied parties to steal from Petrobras in league with private business and company management is a weakness of its state-owned and state-controlled character.

The right opposition has until now been able to use the corruption scandals to push for further privatization. Rousseff and the PT have themselves advanced the partial privatization of Petrobras by asset sales as a solution to the immense costs of corruption and the deepening economic crisis.

In the aftermath of the disaster there is a political opportunity to strike a blow against the whole project of privatization. The only alternative which the ruling parties have to offer Brazil is more privatization at a slower or faster rate with more environmental disasters sure to follow.

Against both state and corporate corruption, the Left must retake the old slogan of nationalization under workers’ control — not just as a labor demand but also an environmental necessity. With a crisis at Petrobras and growing popular hatred of Vale, workers’ management represents the only real alternative to a future of private profit and socialized devastation.

---

Brazil tailings dam spill much smaller than original estimates

Frik Els

Mining.com

8 January 2016

According to the latest satellite assessment by Samarco of a tailings dam burst at its Brazilian iron ore mine that devastated the country's second largest river system, the Rio Doce, the tailing waste spill was much smaller than previously determined.

BHP Billiton, which jointly owns Samarco with Vale, said in its 60-day update since the November 5 incident, the volume of tailings material released when two dams were breached was about 32m cubic metres. Initial estimates were put as high as 60m cubic metres.

Samarco also found that approximately 85% of the released tailings were retained within 85 kilometres of the Fundão dam. Samarco is undertaking several activities to stabilize the released tailings and to prevent more material from entering the river system, including constructing dikes to contain tailings and revegetation along the Gualaxo and Doce rivers.

Work to repair and reinforce the Selinha dike above the Fundão dam in the Germano complex is complete according to the statement while the company is continuing to reinforce the Santarém water dam which overflowed, but which retained some of the tailings from Fundão.

The Brazilian government announced a $5 billion civil damages lawsuit last year, but warned that "the figure is preliminary and could be raised over the judicial process, since the environmental damages of the mud’s arrival at the ocean have not yet been calculated."

The disaster in Brazil’s Minas Gerais state that killed at least 17 people and left hundreds homeless, caused sludge to wash downstream into neighbouring state Espírito Santo through remote mountain valleys reaching the Atlantic ocean 600 kilometres away.

---

Mining company executives indicted in Brazil over the country’s largest environmental disaster

Jenny Gonzales

Mongabay

14 January 2016

Samarco CEO, Ricardo Vescovi De Aragao, is being charged with environmental crimes caused by the disruption of the Fundão tailings dam — Brazil’s largest environmental disaster.
 
Yesterday, Brazil’s federal police in Minas Gerais charged Samarco CEO, Ricardo Vescovi De Aragao, for environmental crimes caused by the disruption of the Fundão tailings dam — Brazil’s largest environmental disaster.

The Samarco and Vale mining companies were also indicted, as well as VogBR Recursos Hídricos e Geotécnica, responsible for signing the statement that declared the dam stable just last year. In a message to Mongabay, VogBR’s CEO, André Euzébio, cleared his company of any wrongdoing, saying they had declared the Fundão dam as stable last July, when they last examined the structure “in the most rigorous manner.”

In addition to the three companies, some Samarco executives were charged, including the dams monitoring coordinator, the Fundão dam manager, the geotechnical manager, and the operations general manager. The federal police did not release the names of the employees, only their positions, and said there could be yet more indictments.

On November 5, Samarco’s dam burst, causing an avalanche of 2.2 billion cubic feet of mud and mine waste that destroyed Bento Rodrigues district, in Mariana, and also affected other districts, such as Águas Claras and Pedras, before reaching the Atlantic Ocean. And on the eve of the tragedy, the Brazilian government had promised to hold Samarco and Vale responsible for the destruction.

The charges are based on Article 54 of the Environmental Crimes Law, which severely castigates “causing pollution of any kind at such levels that result or may result in damage to human health or causing the death of animals or significant destruction of flora.” There are also sections that criminalize “making areas unfit for human habitation, pollution of the water that supplies communities and hinder or prevent the public use of beaches.”

In response to the news, Vale’s press office, declared that the company received the news with surprise. “The indictment reflects a personal understanding of the head of the police and comes at a time when the actual causes of the accident are not technically confirmed yet and, therefore, unknown,” it said.

“In addition”, said the spokesman, “the assumptions of the federal police on a theoretical responsibility of Vale are based on suppositions that have no actual causal link to the accident, as will be timely and technically demonstrated by Vale.”

In a statement, a Samarco spokesperson echoed Vale’s. He said the company “disagrees with the indictment of its staff because there isn’t a technical expert conclusion of the causes of the accident so far.”

Twenty days after the breaking of the Fundão dam, Samarco CEO Ricardo Vescovi De Aragao, had stated that the explanation for the disruption would only be presented by the company within a period of six months to a yearMongabay has tried to contact company representatives at VogBR as well, but there was no response. 

Yesterday — one day past its deadline—Samarco delivered to the Justice Court of Minas Gerais an emergency plan in case of the disruption of their two other dams in Mariana, Germano and Santarém dams. On the same day, Samarco presented a petition justifying the delay, alleging that the company hired to do this work didn’t deliver the material in the time frame.

“The prosecution believes that society can’t be at the mercy of the time frames that meet the convenience of Samarco,” said the State Public Ministry statement, in response. “These studies should have been presented a long time ago.”

Samarco’s request will be decided by the Minas Gerais Justice in the coming days. The company is likely to be hit with a fine of up to $1,250,000 for every day it is delayed in delivering its emergency plan.

Editor's Note:

VogBR Recursos Hídricos e Geotécnica, responsible for signing the statement that declared the dam stable last year, got in touch with Mongabay after we published this piece. In a message to us, VogBR’s CEO, André Euzébio, cleared his company of any wrongdoing, saying they had declared the Fundão dam as stable last July, when they last examined the structure “in the most rigorous manner.”

---

Don't bankroll the next foreign mine disaster

A Brazilian mine spill shows how Canadian agencies risk getting tangled up in abuses.

Karyn Keenan

Above Ground Op Ed, Embassy News

11 January 2016

Thomas L. Friedman's The World Is Flat: A Brief History of the Twenty-First Century suggests that a level playing field has emerged in the world of global commerce, affording competitors equal opportunity. But this analysis ignores government intrusion in the form of massive loans to favoured players and projects.

Case in point: last November’s immense mine spill in the state of Minas Gerais, Brazil's worst environmental disaster, which Brazilian President Dilma Rousseff compared to the Deepwater Horizon catastrophe in the Gulf of Mexico.

Fifty million tons of toxic waste flooded the Doce River, leaving a wake of destruction for hundreds of kilometres. At least 19 are dead and thousands have lost their homes and livelihoods.

Indigenous Krenak people demanding safe drinking water have blocked the local railway. The Brazilian government is suing the mine’s joint venture owners, which includes Brazilian multinational Vale, for over $5 billion USD.

There is a direct Canadian connection to this venture. Export Development Canada, a Crown corporation, provided Vale with hundreds of millions of dollars in financing for its global operations, most recently in 2014.

EDC promotes Canadian exports and investment by issuing government-backed loans, guarantees and insurance. In 2014, EDC provided mining, oil and gas companies with over $28 billion in support. In the same period, the Harper government spent less than $1 billion on international humanitarian assistance.

EDC reports that it screens its transactions for potential impact on human rights and the environment. Its support for clients such as Vale brings this process into question.

In 2011, the United Nations adopted a set of Guiding Principles regarding business and human rights. The principles, promoted by Canada, identify the state-business nexus as an area requiring heightened due diligence. States must protect against human rights abuse by companies that receive support from public agencies such as Export Development Canada.

Last month, the UN Working Group tasked with promoting the Guiding Principles completed a site visit to the Minas Gerais spill area. It confirmed that both the state and private sector in Brazil have failed to implement the principles.

In fact, Vale’s historic environmental and human rights performance is a matter of public record.

At the world’s largest iron ore mine in northern Brazil, the company operates a railway lacking basic security infrastructure. Locals have been hit by passing trains, according to a Brazilian government agency, resulting in death or serious injury. The company’s nickel mine in the state of Pará was recently ordered shut by a Brazilian court. The court order said the project contravened its environmental licence, exposing indigenous populations to toxic waste.

In Canada, five of Vale’s workers died on the job in recent years. In 2013, an Ontario court imposed a record-breaking fine on the company for workplace safety violations responsible for the deaths of two employees. Last year, the Ontario Ministry of Labour laid nine charges against Vale in connection with another workplace death. In October, the company said it was under investigation by Environment Canada and the RCMP regarding allegations of violating the Fisheries Act in 2012.

Nonetheless, twice under Stephen Harper’s government, in 2010 and 2014, EDC provided Vale with hundreds of millions in financing. Yet the agency could provide no guarantee that this bountiful support would produce the intended stimulus to the Canadian economy.

EDC provided loans to Vale for the procurement of Canadian goods and services. However, as a public institution, EDC is subject to Canada’s international trade obligations, which prevent the Crown corporation from compelling its clients to preferentially source from Canadian suppliers. Accordingly, EDC asks its client Vale to consider Canadian suppliers, and seemingly hopes for the best.

As residents along the Doce River begin the difficult process of rebuilding their lives, EDC under the new Trudeau government must undertake a cleanup of its own. The agency reports that it’s working to align its operations with the UN Guiding Principles, but the newly-elected Canadian government must oversee and expedite this process.

In the meantime, EDC should suspend support for sectors with an elevated risk of environmental and human rights impact, such as the aforementioned extractive industries.

EDC’s behaviour indicates that Friedman's world is not truly flat. Nor should Canadians bankroll the next foreign mine disaster.