By Alistair MacDonald, Kris Maher and Kim Mackrael
EMBARRASS, Minn. -- An earthen dam is set to rise behind the
trees of Dan Ehman's 120 woodland acres in northeastern Minnesota's
Iron Range, a region with close ties to mining for more than a
The planned dam, designed to hold back hundreds of millions of
tons of mining waste, will be similar in structure and height --
soaring 250 feet above Mr. Ehman's century-old log cabin -- to one
in Brazil that burst in January, killing 270 in a tsunami of
That disaster, the deadliest of its type in half a century, has
upended the global mining industry. The world's biggest mining
giants have spent months and millions of dollars re-evaluating
their dams. Institutional investors are scrubbing their portfolios,
looking for companies with risky structures -- and helping to
publicize potential stability issues. And environmentalists are
getting new support from residents, some of whom are learning for
the first time about the potential dangers of the dams in their
The U.S. remains one of the countries where the type of dam used
in the Brazil disaster, known as an upstream design, is still being
built. They are effectively banned in parts of Canada, in many
situations in the European Union and now, in Brazil itself. The
planned dam outside of Embarrass uses the design. Last month a
court suspended permits for the mine until the builder makes clear
how it has assessed the Brazil disaster.
"We are allowing dams in the U.S. that countries in the
developing world do not accept," said Steve Emerman, the owner of
Utah-based mining and groundwater consultants Malach
In the Brazil disaster, a dam holding tons of iron ore tailings
near the town of Brumadinho crumbled, sending water, rock and mud
flooding over a square mile. Inspectors had worried about the dam's
integrity for months.
Upstream design dams are built up with the tailings in a
stair-step fashion. The design is one of the simplest and least
expensive. Critics say it is also one of the most dangerous. The
U.S., unlike some other mining nations, doesn't have an accessible
database of upstream dams, though experts estimate there are more
The Army Corps of Engineers monitors some, but not all, of the
tailings dams in the U.S. The corps monitors more than 1,300
tailings dams of all designs, and roughly a quarter of these are
classed as having a "high" or more severe hazard potential, meaning
a failure could cause the loss of human life.
In reaction to the Brazil disaster, a group of large
institutional investors led by the Church of England Pensions Board
asked big miners to disclose details about their mines globally --
listing potential hazards they posed and whether they had ever
experienced any stability issues.
At U.S. and Canadian mines operated by 34 companies that
disclosed information, about 11% of the roughly 560 tailings dams
reported stability issues. According to company filings, about 8%
didn't have full engineering records, the plans which experts say
are necessary to ensure a proper audit of their safety.
In the U.S. alone, stability issues were reported for 18 dams,
and 14 of those were classed as having a "high" or more severe
hazard potential. Of the 18 that reported stability issues, 16 were
upstream dams and one was a partial upstream dam.
Vale SA, which operated the failed Brumadinho dam, disclosed
stability issues at a complex of six of its dams near the city of
Thompson, in the Canadian province of Manitoba. Niki Ashton, a
Canadian legislator representing the area, said when she learned
about the disclosure, she asked local officials if any of them had
been told anything before by Vale. No one had, she said.
"We were all shaken up by Brumadinho," she said.
A spokeswoman for the government of Manitoba said the provincial
regulator, which inspects the dams, hadn't been informed of
stability issues. The regulator made an inspection in August and
saw no imminent risk, she said.
The disclosures were the first warning for many residents that
they were living near structures with problems. Hilda Fitzner, who
lives in Thompson, said she heard about the stability issues from a
friend's Facebook post. "It caught me completely off guard," she
A Vale spokesman said a routine company inspection after the
Brazil disaster revealed the Manitoba dams had a safety factor --
an engineering term that refers to the factor of strength greater
than what is needed for an intended load -- below the level
prescribed by the Canadian Dam Association, a trade group. He said
there is no imminent threat of failure.
Barrick Gold Corp., one of the world's largest gold miners,
disclosed that the upper section of a dam on a disused mine near
Hope, British Columbia, didn't have a full set of engineering
records. It said later, after questions from The Wall Street
Journal, that engineers commissioned by the company had raised
concerns in the past about the dam's upper and lower sections.
These concerns weren't disclosed in its public filing.
Both sections have a "very high" hazard rating, meaning a
collapse could result in up to 100 deaths and significant
Barrick said that in 2016 it determined the upper section of the
dam needed bolstering, and that in 2002, an engineer raised
concerns about the lower section of the dam because of a pond of
water that formed on top of it. Water collecting on a tailings dam
can weaken the structure.
"My kids swam in that," said Bruce Glowienka, who owns property
near the dam. "Wow, wow, wow."
Barrick said it spent 20 million Canadian dollars, or about
US$15 million, addressing the issues. The work took the possibility
of a failure from a "relatively low likelihood to a very, very low
likelihood, " said Patrick Malone, Barrick's head of legal and
regulatory affairs in North America.
After the Brumadinho collapse, investor Robert Crayfourd, a fund
manager at London-based CQS New City Investment Managers, sent an
email to all the miners in his portfolio asking them for more
information on their dams. The company manages about $182 million
in the resource sector. Post Brumadinho, any upstream dam "would be
a major red flag," Mr. Crayfourd said.
Joe Foster, a New York-based fund manager at VanEck, also dug
deep into the tailings-dam exposures of the miners whose shares he
owns. Though the former geologist didn't find anything of concern
in his own portfolio, Brumadinho brought home the risks that
tailings dams pose, he said.
Miners have made changes since Brumadinho. Canadian-based gold
miner Agnico Eagle Mines Ltd. began bringing a specialist in
tailings dams to its meetings with funds for the first time, CEO
Sean Boyd said.
After reading that Vale's outside safety auditors had known
about risks at the Brumadinho dam, Richard Adkerson, chief
executive of Freeport-McMoRan Inc., called his company's senior
managers into a room. "If anyone in our organization, or any of our
external experts, has any indication of problems, it is not
acceptable to not pass that on," he said he told them.
The exact causes of the Brumadinho disaster aren't yet known.
While mine dams of all designs have failed, the upstream type has
produced more disasters.
In 2015, another upstream dam operated in Brazil by a joint
venture between Vale and BHP Group Ltd. collapsed , killing 19
people. A year earlier, one at Mount Polley, owned by Imperial
Metals Corp., in British Columbia burst, sending some 25 million
cubic meters of gold and copper-mining waste pouring into a pair of
glacial lakes. No one died in the sparsely populated region, but
the accident is classified as one of Canada's worst environmental
In 1972, an upstream dam holding back coal mining waste
collapsed in Buffalo Creek, West Virginia, releasing 130 million
gallons of slurry that killed 125 people, wiped out entire towns
and left more than 4,000 people homeless -- the worst dam failure
in U.S. history.
After Brumadinho, Brazil banned upstream dams completely.
Earthquake prone Chile and Peru have prohibited them for some time.
In Ontario, where PolyMet Mining Corp., the company building the
dam outside Embarrass, is headquartered, upstream dams are
effectively banned because they are no longer considered part of
the mining industry's "best practices," a requirement before local
authorities grant a permit.
The European Union also bans them in certain situations, such as
in places where there is a risk of seismic activity.
"Why is an upstream construction method good enough for
Minnesota, when Brazil has found this design so unacceptable that
old upstream dams must be decommissioned as well as new ones
prohibited?" said Paula Maccabee, an attorney with Water Legacy, an
environmental group focused on protecting water quality in
Water Legacy cited Brazilian academic research that found that
66% of mining dam failures world-wide involved upstream tailings
dams, and it pointed to a United Nations report that listed eight
such failures between 2014 and October 2017 in Canada, Mexico,
Brazil, China, Israel and the U.S.
Last month, the Minnesota Court of Appeals suspended permits for
the new PolyMet mine, preventing construction until the state
regulator advises the court on its evaluation of the Brazil dam
failure, among other things.
In response to the ruling, a spokesman for PolyMet, which is
majority owned by London-listed mining giant Glencore PLC, pointed
to an analysis from the Minnesota Department of Natural Resources,
the state regulator that approved the plan for the dam, which
concluded there were critical differences between the Brazil dam
and the planned U.S. dam, including the design, topography and
local seismic activity.
"Nothing in the [Brazil] dam failure changed what we've
evaluated and the results of our stability analyses," Christie
Kearney, PolyMet's environmental site director, said before the
ruling. Both PolyMet and the Minnesota Department of Natural
Resources said the dam was safe.
The U.S. Mine Safety and Health Administration, a Federal agency
that enforces compliance in mining with health and safety
standards, said it has met with Brazil's National Mining Agency to
discuss Brumadinho. "Once the cause of the dam collapse is
determined, MSHA will evaluate the findings and how they relate to
practices in the United States," a spokeswoman said.
The Association of State Dam Safety Officials, a trade body that
tries to improve U.S. dam safety, is considering recommending the
addition of specific information about tailings facilities for the
first time as it helps update the U.S. Federal Emergency Management
Agency's guidance on dam safety regulation. It was last updated in
2007 and is tentatively planned to be updated in late 2020.
For now, though, tailings dams in most U.S. states are regulated
in the same way as water dams, despite the fundamental differences
in their materials, operations, construction and purpose, according
to dam experts.
"There can be potential issues if the regulatory authority
doesn't have sufficient expertise and experience with tailings
dams," said Mark Ogden, a technical specialist at the Association
of State Dam Safety Officials.
Environmental groups have used the powerful video of the
collapse of the dam in Brumadinho, which was recorded by a camera
on site, to capture the attention of the public.
In Queen Valley, Ariz., population 829, a March meeting to
discuss a potential dam for a nearby mining project including a
viewing of the video. About 300 people attended the event,
sponsored by two local environmental groups, compared with about
100 who attended such meetings before the disaster, according to
John Krieg, a retired electrician who lives in Queen Valley and
attended the meeting.
"We'll be looking up at a 500-foot dam, containing 1.6 billion
tons of toxic waste and wondering when it is going to collapse and
bury the community," Mr. Krieg said.
A spokesman for Resolution Copper, a joint venture between BHP
and Rio Tinto PLC that is proposing the mine, said the dam it plans
won't have the upstream design of the one in Brazil. He said
tailings experts, government agencies and the public are all
involved in consultations for the project.
Environmentalists have for years opposed the plan for the new
dam outside Embarrass. The project will build a new upstream
mining-waste dam on top of an existing upstream dam -- which is
already visible from Mr. Ehman's land. The project will almost
double the dam's capacity to 525 million tons to hold waste PolyMet
expects from a planned copper and nickel mine. Many people living
close to the mine have embraced the plan, eager for the return of
jobs to the region.
Mr. Ehman's property and 34 others sit inside what is called the
"inundation zone" of the project: A full-blown failure would send a
wave of waste reaching as high as 9 feet and traveling at speeds of
up to 25 feet per second through the zone, according to a study by
No one told Mr. Ehman, a 61-year-old professional
"Oh, jeez. What are you saying? That, possibly, could happen?"
Mr. Ehman asked.
The inundation-zone report was published on the Minnesota
Department of Natural Resources website but not flagged to Mr.
Ehman and other residents interviewed in the zone, who didn't see
A spokesman for PolyMet said the company planned to inform
residents in the inundation zone after they had concluded a second
report on what would happen in the event of a collapse. The company
said it has an evacuation plan in case of emergency, and that there
are a series of lakes and water dams that would act as barriers to
any serious spread of tailings in a breach.
The Minnesota Department of Natural Resources said the chances
of a catastrophic breach are "very unlikely," based on the
dam-break report that PolyMet completed. "No other project in the
history of Minnesota had been more thoroughly evaluated," the
department spokesman said.
Tony Licari, whose barn is visible from the north end of the
existing dam, isn't worried. "We're a mining region," said Mr.
Licari, who works as a pit supervisor at a nearby taconite mine.
"It's what we do up here."
A Native American tribe that hunts and fishes close to the mine
has expressed opposition, said Nancy Schuldt, water-protection
coordinator with the Fond du Lac Band of the Lake Superior
Chippewa. Brumadinho "played into the sense of dread we have about
the likelihood of that sort of catastrophic failure," she said.
--Angela Calderon contributed to this article.
Write to Alistair MacDonald at firstname.lastname@example.org, Kris
Maher at email@example.com and Kim Mackrael at
(END) Dow Jones Newswires
October 14, 2019 10:57 ET (14:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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