By eliminating tailings dams, miners will get access to new metal sources

Global demand for battery metals is soaring, driven by technological advancements and the clean energy transition. To meet this need, the mining and metals industry needs to bring new sources of critical metals on stream. However, communities around the world increasingly oppose new mining projects because of the environmental, health, and socio-economic risks. What could an upgraded social contract look like to develop new sources of metals?

We believe that one key is to eliminate tailings dams and establish a track record of good environmental management. This will establish trust and goodwill with community and government stakeholders to unlock access to new projects.

For metals like lithium, the industry must establish a whole new supply side, essentially from scratch. Other metals, like copper, have well-established supply chains but existing copper mines already struggle to sustain the current supply of 22M tonnes, let alone deliver the 40-50% increase required. 

The only way the global mining industry can meet this demand is to develop new sources of critical metals.

Anglo American estimates that there are 500 Mt of copper resources waiting to come on stream, more than enough to support the global energy transition’s need for copper. 

Yet, 90% of these resources are “constrained” by legitimate concerns about the externalities that the new mining activity would impose on the host societies and economies. It’s clear, the industry needs an upgraded social contract to develop new sources of metals. 

Tailings dams are a major source of concern, causing local communities problems that range from aesthetic to immediately life-threatening. Brent Slattery, Future Element’s COO, says: “The problems with tailings dams are so pervasive and so well recognised now. In 20 years’ time, it’s entirely conceivable that you won’t be able to get approval to build a new mine with a tailings dam in Australia.” 

This is already playing out in nations which promote responsible mining where stakeholder coalitions such as IRMA combine forces with regulators to protect local communities from the harm they cause. 

“In all scenarios, we believe that by eliminating tailings dams, mining companies will enhance their licence to develop the new metal sources the world is crying out for. It makes sense to do that, firstly because it’s possible and secondly because there’s value upside for all stakeholders,” he says.

An improved social contract is required to develop new projects

Licence to operate has been a considered a strategic priority by mining industry leaders for decades, but licence to grow is often overlooked.

“Is it not time for the industry to place much greater emphasis on its social licence to develop?” Carter asks, “It wouldn’t make sense to keep building 1960s lookalike mines in the 2020s.”

The broader community’s discontent with mining has many sources. Stakeholders invariably oppose new projects based on a combination of concerns about: waste management; protection of aquifers and waterways; land use and transformation; equitable sharing of economic opportunities and safeguards against economic disruptions; proper consideration of indigenous rights; or preservation of fauna and flora biodiversity, to name just the biggest concerns.

In 2024, existing operations including Bingham Canyon in Utah, Cobre Panama, Las Bambas in Peru, and Escondida in Chile are struggling to meet production targets in the face of disruptions caused by one or more of these issues. Copper prices are climbing as a result. It’s no surprise that the same concerns underpin opposition to projects such as Pebble in Alaska, Twin Waters in Minnesota, Resolution in Arizona, and the underground extension of an existing operation at Los Bronces in Chile. 

In the less mature lithium market, similar scenarios are playing out. There are strong geopolitical reasons to establish battery manufacturing capabilities in North America and Europe and this requires new, local sources of battery-grade lithium. Hence the concerted efforts to bring promising lithium projects on stream such as Thacker Pass in Nevada and Jadar in Serbia. 

“It’s obvious the proponents of new projects are aware of the concerns that fuel opposition from stakeholder groups,” says Carter, “and they are clearly trying to find viable outcomes.” However, the majority of these projects get delayed for long periods to haggle over partial or imperfect solutions. “Those that do move forward tend to do so because of the relative strength of the coalition in favour of the project rather than any fundamental improvement in the social contract,” he explains. 

Instead, we believe a new social licence can be created. For example, one based on a commitment to not produce any tailings at all.

Rather than promise to ‘clean up the tailings when we’re finished’, miners could instead propose a project that doesn’t produce any tailings because the component parts — metal units, water and land mass — will be fully used or repurposed as they proceed. And the next custodians of the land could be encouraged to participate in those processes at every step of the way.

Global opposition to tailings dams

As the Anglo American data on prospective copper projects suggests, tailings dams consistently rank in the top two or three reasons for opposing new mining developments. And justifiably so considering the catastrophic dam failures at Brumadinho, Samarco and Jagersfontein. The loss of life and the environmental and economic devastation caused by those events are both tragic and indelible in the global consciousness. 

The harsh reality is that tailings dams failures have increased in rate and severity. A 2022 report by Earthworks estimated that there are 30,000 to 35,000 active, inactive and abandoned tailings dams across the globe. Arguably, every one of these storage facilities is an ongoing liability. And now the rate at which we create tailings is accelerating because of more production and declining ore grades. 

Sudden catastrophic failures are the most dramatic and visible problem with tailings storage facilities, but other pervasive problems are more hidden. Uncontrolled and accidental release of tailings materials over time causes chronic environmental harm and adverse public health consequences. 

Massive pollution of waterways can occur rapidly when pipes burst or dams overflow, or over more extended periods of time through leaching and seepage. Either way, the damage takes decades to remediate. Sometimes it can’t be fully cleaned up, ever. 

In 1975, the dam at Mike Horse Mine in Montana failed, contaminating the The Blackfoot River. The cleanup is ongoing and has cost more than $40 million to date. Nearly 40 years later, cleanup efforts are only now starting to show results and restore the area to its previous state.

No community wants or should ever have to live with discoloured waterways, let alone drink water that might be contaminated with cyanide, arsenic, lead or sulphuric acid. 

Tailings dams are also a significant consideration in Visual Impact Assessments demanded by environmental protection regulations. These massive structures can tower over and detract from the landscape. Together with the deep craters left behind by open pit mining, tailings dams are the embodiment of scarred landscapes, often in places of extraordinary natural beauty. 

Resettlement, either on the lease or downstream, could be avoided completely by not building tailings dams at all.

The mining industry now strives to strengthen and monitor tailings storage facilities to prevent and anticipate failures and damage. Dewatering and dry-stacking is another approach that improves the situation and is rapidly becoming an accepted norm.

However, as Earthworks so succinctly puts it: “The safest tailings facility is the one that is not built.” 

Brent Slattery puts it differently. “Monitoring and strengthening of tailings dams are akin to palliative medicine. Dewatering isn’t fully solving the problem either, it’s a half-measure; you’re still adding material to the storage facility,” he explains.

Which begs the question: what should be done? 

It’s already feasible to eliminate tailings dams

Complete rehabilitation of tailings is no longer a pipedream. It’s a realistic and achievable goal — the key is to process and rehabilitate tailings as they are produced.

Several mining operations have already taken this progressive approach to rehabilitation beyond a concept. New Century Resources acquired Century Mine in Queensland, Australia, then created more than $750M in value over five years for the mine and company using an economic rehabilitation approach. Massive environmental bonds were reduced, transforming its balance sheet.

It’s important to note that New Century has not yet eliminated tailings dams completely. Rather, the process and technologies used there represent a compelling proof of concept, proving that a total rehabilitation approach to tailings can work.

In Tasmania, Australia, Hellyer Metals partnered with EnviroGold Global to reprocess 9 million tonnes of legacy tailings. It includes lead and zinc concentrates, along with gold and silver credits, powered by renewable hydro power.

In the US and Canada, Salmon Gold has partnered with Regeneration to re-mine gold from old placer mine sites, then restored fish habitat with sustainable restoration practices.  

In South Africa, DRDGOLD is reclaiming and reprocessing existing mine waste. Their operations include Ergo — where they have mined 190 million tons and are now extending the mine life by another 15 years — and Far West Gold Recoveries. 

Advances in technology and innovative practices have enabled this transformation. 

With these advances in technology, and the right commercial model that aligns financial, technological, and operational partners, it’s now entirely realistic to reprocess tailings alongside the primary feed and eliminate tailings dams from the picture.

A new social licence unlocks dormant value

Economic rehabilitation of tailings can unlock dormant value that benefits a broader set of community stakeholders. The economic value is obvious — an estimated $2 trillion or more can be unlocked from tailings globally. However, the community value is more important. It’s the key that unlocks social licence.

The technical ability to eliminate tailings dams isn’t enough on its own to capture this enormous prize. There also needs to be collective and united will from a broad, inclusive coalition of stakeholders. This requires a major shift in the mining company’s mindset about the nature and upside of an upgraded social contract.

“I think it’s fair to describe the current approach as ‘minimise the harm, provide some measure of compensation and make a modest share of the benefits available to affected stakeholders,” Carter says.

“This approach does not eliminate the externalities that so legitimately trouble the opponents of new mining projects. It has not remediated the tens of thousands of legacy open pit craters and tailings facilities. It has not protected pristine waterways in Latin America, Canada, PNG, Indonesia or New Zealand. It has not relieved the pain of desecrated sacred sites. Nor has it solved the boom-and-bust cycle in mineral resource extraction.”

What if everyone with a stake in a proposed new project could trust that the project would genuinely benefit the local community and broader society? There are ways to demonstrate that a new mine will:

• Enhance the natural beauty of the region 
• Improve the quality, quantity and attractiveness of pristine waterways while making “working water” available for a range of activities, e.g., agriculture or sports facilities, beyond the mining project 
• Support the growth and establishment of unrelated businesses from ecotourism to high-tech manufacturing 
• Create education and job opportunities that last beyond the life of the mine
• Strengthen a community culture that embraces diversity and progress while respecting traditions?  

Would proposed developments like Twin Waters and Jadar have better prospects if they met the standards implied by those questions? We believe so.

Of course, making this a reality requires mining executives to make some large mindset shifts. 

Mining companies are heavily siloed and core functions like production are the focus because that’s where their revenue comes from. The same level of effort isn’t put into managing waste streams. These are limited to maintaining regulatory compliance and seen as a peripheral problem, not an essential business function.

For this to change, reprocessing tailings should be reframed as an investment, not a cost. If miners see themselves as the custodians of the land, rather than the owners of it, they will develop a new social contract where all stakeholders collaborate to decide what to do with the land and water impacted by the mine. Progressive rehabilitation of tailings then isn’t a cost, but an investment in preparing the water and the ground to the benefit of all stakeholders. An investment that could be the deciding factor in getting a project approved in the first place.

Now’s the time to act on this opportunity

The mining companies that establish a track record of good tailings management now will benefit most from a better social contract in the near future.

Embracing an upgraded social contract is clearly beneficial from a “greater good” perspective. However, it’s also very much in the self-interest of every mining company to operate this way. 

From a shareholders’ perspective, this approach will:

1. Relieve the mining company of the massive burden of closure liabilities which can amount to billions of dollars.
2. Accelerate the industry’s transition into the “net zero” economy.
3. Offer privileged access to the next generation of attractive mineral resources, the main driver of mining companies’ wealth creation.

Community opposition to new projects because of tailings and water risks will only continue to grow. And it will even impact the licence to operate at existing mines, both of which will affect earnings and profitability. 

Every mine can operate and close with a positive legacy and transition towards sustainable metal supply. Forward-thinking mining companies that eliminate tailings dams will be rewarded with much more favourable licences to operate and privileged access to develop new ore bodies.

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We help forward-thinking mining companies move towards a future without tailings dams. So they can clean up the water and land while creating strong economic growth in their business. 

Reach out for a confidential discussion to find out what the possibilities are for your operation.