Disregard to science and engineering of mining should be a big concern especially when it comes to giving the land back to the environment it came from. Mining companies have a lot to do in ensuring a stable environment, says Subrato K Ghosh.
"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete." -R Buckminster Fuller (1981)
FICCI’s recent report on the Indian mining sector titled "Development of Indian Mining Industry – The Way Forward" has advocated that mining be recognised as a core industry as it is in Australia, Canada and USA. Same sentiment is reflected in another report from McKinsey published in a CII summit in 2012. Indeed with demand for raw material growing yet the sector remaining sluggish it is imperative that mining sector gets special attention. It is imperative to reform the Indian mining sector by creating a favourable policy environment and setting up core enablers such as infrastructure and human capital.
Earlier, in a strategy paper published in 2011, the Ministry of Mines has projected that should India succeed to unlock its full potential the sector can grow 10 to 12 percent per year over the next 20 years. There is potential for an estimated $210 billion to $250 billion to contribute to India’s GDP by the year 2025. With its vast natural resources and resource base, India has the potential to make it big. In fact, for years the Indian mining sector has been a success story in waiting (McKinsey report, 2012). However, for that to happen, no doubt India need progressive policies and structural changes, good infrastructure and faster decision making process in place, but a lot would depend on the mining companies and corporates themselves.
It is important for the industry to recognise that part of the India problem is because of the way we have performed, sometimes with utter disregard to the science and engineering of mining, completely ignoring the other adverse impacts of mining on the physical and social environment. In most cases, we had only one point agenda of getting statutory permits and filling the tick boxes for statutory approvals. It is no surprise, therefore, that the mining sector has come to be associated with scams, conflicts, violence and ecological degradation in the last few years.
It is also important the industry identifies that business as usual is no longer an option. Mining is not just about digging and blasting. It is about engineering. It is about application of scientific and mathematical principles to practical ends.
Companies barely realised the very importance of a robust feasibility study, outside the realm of statutory requirement. We cannot still see that mine closure is an integral part of mine planning and design for mining.
Mining operations are relatively short term, finite economic activities. When we plan to operate somewhere over the medium term, it may be more in our interests than we think, to invest in a stable and better governed society. The mineral reserves belonging to a country belong to society, as represented by their government. Mineral reserves can only be extracted and sold once, it is the company’s responsibility to ensure a stable environment. We need to recognise that environmental laws are inevitable laws of nature.
What corporates need is a beyond-compliance approach, an appreciation that mining feasibility study is the most critical component of a mineral project venture. Feasibility study is an all-encompassing, iterative mine planning process necessary to confirm economical, environmental and the societal viability and benefits of a mining project. It is the best opportunity the project owner will have to define what the project could, should and will be.
If corporate decision makers settle on meeting minimum compliance requirements, without all stakeholders understanding the business benefits, they can miss the opportunity to begin projects on a solid footing, using proactive risk management and ‘future-proofing’ their developments.
Stage-gate process to mine feasibility
I cannot remember how many times we have heard a client saying, "We have an approved mine plan, and we want to start mining in a year." Mining is not just about winning the ore. At the very core, mining disturbs the natural earth form, interferes with elements that have formed naturally. Some mining method can be less intrusive or there can be ways and means to minimise adverse impacts. A feasibility study evaluates ‘sustainable’ options. A feasibility study is an engineering study based on test work and engineering analysis, which presents enough information to determine whether or not the project should be advanced to the final engineering and construction stage.
Traditionally a Mine Plan in India focuses primarily on one central question: maximising resource extraction with the main thrust being to get statutory clearances. Detailed Project Report (DPR), sometimes accomplished with the intent of "undertaking detailed feasibility study", often ends up focusing on profitability and project cost details. Traditionally, the issue with waste disposal, plant tailings disposal, river or nala diversion, environmental impacts, and reclamation requirement have played but a small part in Mine Plan and DPR. The conventional wisdom (or assumption) has been that there is always a place for the waste and tailings and other aspects could be managed as they go along and the costs are but a small part of the mine, hence miners pay no particular attention to them in deciding if the mine is feasible.
It is important to recognise that undertaking a Feasibility Study does not automatically make a project feasible. With fast changing business climate, stricter regulatory regime, social awareness and increased expectation from the general populace, miners need to think of feasibility studies as more than just mining or financial documents with health, safety, environment and social issues as ‘inconvenient cost’ on the way to addressing the financial hurdle.
It is time Indian organisations adopt the stage-gate process of undertaking feasibility studies (see figure 1). The feasibility study process deals with uncertainty, and a phased and iterative study approach has evolved as a consequence. It is common practice internationally for the feasibility study process to involve three phases, namely:
i) the conceptual or scoping phase,
ii) the preliminary or pre-feasibility phase, and
iii) the final or definitive phase.
Between each feasibility stages, risk assessment of each study is carried out by independent consultants.
The success of large capital projects in mining often depends on decisions made early on in the project lifecycle. Any intervention is best done early, preferably during phases i) or ii) above.
The principal purpose of a Feasibility Study is to determine whether a development opportunity makes good business sense, not just whether it is technically possible. The feasibility study process must demonstrate that not only have the technical issues been satisfactorily addressed, but also that the broader commercial, economic and social issues have been considered in the development of a comprehensive business plan, which includes an assessment of the risk-reward profile of the proposed development.
Mine closure: Cyclic evaluation
Mining is done for profit. Mining excavates rock (ore and waste). But mining disturbs the nature’s equilibrium in the region of mining and impacts the surrounding. It is only obvious that minimising the environmental disturbance caused by extraction activities, preservation of natural resources and reduction of all types of pollution is fundamental to mine development planning. Key aspects are careful planning of the mining activity before it begins and extraction site reclamation, during and after mining works. Purpose should be to restore the mine back to its natural state as it was prior to extraction, a domain of mine closure planning. That the need for closure planning arise because of mining and its impact, it is only fundamental that Closure planning is an integral part of mine development and operational planning.
Closure planning is just another "leg" of mine planning. The mining process, and the mine closure planning process, the design and decisions only evolve through stages from conceptual to feasibility to permitting to operating to closure and finally to a post closure stage (see figure 2). Mine closure plans include complex natural and engineered systems involving geology, geotechnics, hydrogeology, hydrology, geochemistry, biology, ecology and social systems. Given that such plans seeks to address multiple elements, each design and development plan goes through formal and informal risk assessment (Failure Mode and Effects Analyses-FMEA), evaluation of impacts and trade-offs (Multiple Account Analysis, or MAA). The circle at the top of the figure 2 illustrates the decision-making activities that are typically involved at each stage.
FMEA is intended to minimise financial as well as environmental risk associated with complex, long duration engineered systems as represented by the closure measures. The MAA provides a basis for the evaluation of impacts and trade-offs where large, high economic value projects also have high, and potentially long term, social and environmental impacts (Infomine E-Book). MAA provides the mechanism for communication of stakeholder values, as well as the accounting system by which they can be taken into consideration in the development of control and closure plans that address concerns from all stakeholders.
As the mining sector stands poised for greater growth, the need for more comprehensive planning and implementation of mining projects cannot be over emphasised. While this will require progress on a number of fronts, perhaps the most important aspect will be the willingness of corporate decision makers to pursue a beyond-compliance approach to project development. At the end of the day, better performance from the Indian industry will make its claim for a core industry status more legitimate.
The author is Director & Principal Consultant at SRK Consulting (India), a Kolkata-based mining consultant group.
Leave a Reply
You must be logged in to post a comment.