Water and mining, disasters & opportunities. The Dutch approach.
My name is Dirk-Jan Koch, I am the special envoy for natural resources of the Netherlands. This means that I am some kind of an ambassador, not for a country, but for a theme. Natural resources are a key theme for the Netherlands, and I am glad to be able to represent the Kingdom on this crucial topic. I know that many of you are also keenly interested in nature and its resources, otherwise you wouldn’t have become geologists in the first place.
A couple of weeks ago I was in Brazil and the headlines of the news were all focused on the terrible collapse of a mining dam. On 5 November a huge mining dam collapsed at an iron ore mine in the state of Minas Gerais. The whole town of Bento Rodrigues was swept away by 50 million cubic meters of mud. Local newspapers reported about a ‘tsunami of mud’. At least 16 people were killed and hundreds of people were left homeless.
The tailings failure had enormous social and environmental consequences for tens of thousands of Brazilians. This is not surprising given the amount of mud that was dragged along the Rio Doce river in the South-East of Brazil. Around 50 million cubic meters of toxic waste has been passing down through this 800 kilometer long river Rio Doce, killing the fish and harming the fishing communities living alongside the river. Two weeks after the dam burst, the toxic mud reached the ocean. The punishment is tough and the government demands $5 billion from the companies. Also, (1) immediately all the assets of BHP and Vale were frozen; (2) Samarco had to make an initial deposit of $500 million; (3) the companies have to come up with an extensive clean-up plan and work out how to stop mud from contaminating sources of mineral water; (4) and they must evaluate the contamination of fish and the possible risks of consuming these fish.
All this because a single dam collapsed. I wish such collapses would happen only once in a lifetime, but unfortunately we have to observe it is happening on all continents, and almost on a yearly basis. In 2014 we had the Mount Polley accident in Canada leading to extreme environmental tragedies, similar to those in Brazil. And before that we had the spills in Romania. There is a long list of collapses of tailing dams. With the rise of extreme weather events, the question is not if a tailings dam is going to burst again, but when and where.
But tailing dams are fare from being the only challenge in water and mining. The mining industry uses about 600 gigaliters of water a year, which can have a major impacts on access to drinking water. 70% of the mining operations of the big six mining firms are in countries with high levels of water stress. So water risks, are corporate risks. Today, I will not only talk about risks. I will talk about solutions. Dutch solutions. Because in the Netherlands we had (and have) are our fair share of water risks, but we managed to solve them, by combining the efforts of our industries, university and the government. And like in mining it is not just about dams and dykes, it is about integral water management.
The Netherlands learnt water management the hard way
But we are not at the Mining Indaba to learn about the problems. We are here to learn about the solutions. Well, we the Dutch learned the solutions the hard way. Let me hope that by this small contribution, your countries and companies don’t have to go through the suffering we went through. Always better to learn from other peoples’ mistakes. As you might know we have had quite some floods as a result of dyke breakthroughs in the Netherlands as well.
In 1953 the Netherlands was confronted with the powers of the sea. Caused by a heavy storm to almost 5 meters above sea level. The dykes were too low and too weak to cope with the enormous power of the water, several dykes broke and were flooded. It was an enormous human tragedy: 1,836 people died. Tens of thousands of farm animals died, houses were destroyed and the infrastructure was crushed.
So then we finally got our act together, since 1953, despite over a quarter of our country being underneath the sea level, we had no water disasters at all. There were two success factors: technology and cooperation. Looking at technology, the disasters demonstrated it was clear that something needed to be done about the vulnerable position of our coastal provinces against the water. The idea was born to cut off the sea from freely flowing into the internal waters in the future. The outcome of this plan were the ‘Deltawerken’, a set of skillfully built dykes and locks to protect the southern provinces from high sea levels. You are all leaders and in the end you are more interested to know what history books write about you, than what the daily rating of the company’s stock is. You would like to make a difference. Well, you can make a difference if you manage water effectively. Effective water management requires us to think long-term and focus on the bigger picture, not on short term wins.
But technology alone couldn’t have done the trick. We needed to have a change in our mindset: we needed to cooperate better. The term ‘Poldermodel’ is nowadays used to refer to the consensus-based policy making of the Dutch, for which we are known worldwide. The cooperation that was necessary in these cases of emergencies, when water levels were rising, demonstrated that the Dutch people were able to set aside their differences and compromise in order to fight a common threat and set up independent water boards. You don’t do water management for the communities; you do it with the communities. Communities are not adversaries, they are the principle allies in an adequate water containment strategy. Currently, there is $25 billion of stalled investments in mining due to disputes with the local population. It has been calculated that assets worth about 10% of the company can demand up to 80% of the time of senior management, including the CEO.
Introducing the Dutch Water & Mining Platform
As I already underlined, the time is now to find sustainable solutions for these challenges. The Dutch Water Sector is working permanently on new innovative and integral solutions with a long-term approach. The Netherlands – from its position as worldwide leader on integrated water management – therefore looks at these challenges as an opportunity to bring its knowledge and expertise. We like to challenge brains. Some call the Dutch stingy. We call it cost effective. We can handle it if there is too much water, too little water, or the wrong type of water. Although we can also learn a lot from the mining sector as well. For the mining industry, the Dutch water sector offers a wide range of expertise on improving water management practices in mining operations but also to mitigate the impact of mining activities on the environment, water quality and land use.
Over the last couple of years we realized that with our successful experiences in water management, we might contribute something to the world, and therefore I am very pleased that I can announce today the Dutch Water & Mining Platform, in which research institutes, private sector actors and government actors come together. It is no surprise that you will see an integrated Dutch team present here today, consisting of some of the finest scientific engineers, top-notch firms and diplomats and civil servants. This network is the basis of the Dutch Water and Mining Platform and we invite you to join! This initiative is a necessity of exchanging knowledge, complement and strength each other. The platform aims to engage with the mining industry to look jointly at the strategies and solutions needed to achieve a sustainable mining that can develop in balance with the environment, water resources and society. The platform uses the co-create model, so we are not the one providing the solutions for you, we will co-create them with you. Every situation is unique and requires unique co-created specialized solutions.
Let me start to conclude
The demand for minerals and metals will be rising sharply over the coming 20 years. A part could and should be covered by increased levels recycling and reuse. What we have seen over the last decade is that the quality of ores we are finding are decreasing. This means that we will need to dig deeper, get rid of more waste: processes that require a lot of water. And more often than in the past we are extracting resources from water scarce regions. So our prediction is that the challenges around mining and water will become bigger and not smaller.
Investors don’t like risks, but the problem is that water risks are not properly enough integrated into investment decisions. Let me give an example from the United States: 93% of the sites with acid drainage problems had not anticipated this risk in their EIAs. Our suggestions would be that the environmental impact assessment focus more and in depth on water management issues; we can’t wait for a disaster to happen, we need to do more to prevent it from happening. For humanitarian reasons, but also for financial reasons: think about the $5 billion fine that has hit Vale and BHP.
Working on the interlinkages between mining and water is not an option, it is a must. Through the way the Netherlands as a country came to exist, it is at this point the Dutch can contribute. As an effect of its historical relationship with nature, the Dutch way of working is characterized by melding various points of view into a solutions that are fit for purpose. Our aim is to help foster the development of the mining industry by providing enabling solutions. It is for a reason that the Dutch strongly believe that knowledge sharing creates value. We are more than eager to commonly face today’s challenges.
This article is a shortened version of Mr. Koch’s keynote speech held at Mining Indaba, on 10 February in Cape Town.
About the Author: Dr. Dirk-Jan Koch is Special Envoy for Natural Resources, Netherlands.
Follow him on Twitter at @DirkJanKoch.
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