Extreme weather likely to affect tailings dam closures in Brazil

As extreme weather events are hitting Brazil more often, the mandated decommissioning processes of mining tailings dams may have to be modified.

After one dam collapsed in 2015 and another in 2019, legislators outlawed the building of new structures and ordered the decommissioning of existing ones.

"This [decommissioning] process is very complex and has to be done very carefully and mining companies are investing a large amount of resources in such processes," Raul Jungmann, the head of Brazilian mining association Ibram said during a press conference in response to a question by BNamericas.

He said that companies are investing 30 billion reais (US$5.5bn) in decommissioning, with 10bn reais having been executed.

"Extreme weather events are a fact that concerns us. We still don't have a determination from [mining regulator] ANM to readjust the decommissioning process, but we will discuss this with the authorities to reach a better conclusion about it," said Jungmann.

Extreme weather has caused more concerns amid the floods that devastated Rio Grande do Sul state in May.

Minas Gerais state in the country’s southeast hosts most tailings dams, and although it has not been affected by a disaster similar to that in Rio Grande do Sul, industry players are taking precautions.

Overall, 942 of the country’s 26,679 dams are used for mining, especially in Minas Gerais, where decades-long iron ore production generated mountains of tailings.

"Of the total of mining dams, 469 are registered under the national dam safety policy. This is because these dams hold more than 3 million cubic meters of tailings and their heights exceed 15m," said Jungmann, underlining that these dams must be monitored until decommissioning is complete.

Upstream dams are especially at risk. While 74 such structures were operating in 2019, 52 remain and are currently being decommissioned. All dams in high-risk situations are in unpopulated areas and do not pose a threat to human lives.

According to Ibram, 90% of these dams will likely be completely decommissioned by 2027.

LEGAL ISSUES

Aside from human and environmental impacts, the dam tragedies in Brazil also have financial and legal impacts for companies.

The sector's biggest-ever litigation case over the deadly Mariana tailings dam collapse in 2015 is still not settled.

When the dam in Minas Gerais, operated by Samarco Mineração, a joint venture between mining giants Vale and BHP, collapsed it released 40mn cubic meters of toxic sludge that destroyed villages, killed 19 people and poisoned rivers in Minas Gerais and Espírito Santo state.

The attorney general’s office (AGU) and representatives of the two states are negotiating with companies a compensation agreement that could reach some 140bn reais, which would make it the largest settlement on record in Brazil.

In parallel, lawsuits have been filed in both the UK and the Netherlands on behalf of dozens of municipalities in the affected area, representing some 700,000 people. The UK lawsuit involves compensation of 230bn reais. But Ibram filed a legal action with the supreme court to oppose these lawsuits.

"The supreme court cannot allow a duplicity of actions, as this creates an unprecedented risk for mining companies and for Brazil's economy. The people affected do have the right to seek their compensation, but this cannot be done in international courts, otherwise we run the risk of later seeing similar actions taking place in several other countries, often motivated by vulture investment funds, that finance international law firms," Jungmann said.