Global Risk Evaluations provides a range of specialist risk management services to assist clients in better understanding and managing their operational risks. Combining first hand operational and management experience, together with an analytical model for identifying and assessing risks, Global Risk Evaluations highlights areas of exposure and then provides a range of practical solutions, working with the client in identifying the most relevant risk mitigation measures and in developing risk management programmes and training.
The need to manage risk, and to be seen to be managing risk, has become a dominant theme across all businesses. The Mining industry has never been ‘risk averse’ and that is unlikely to change. However, the unusual situation is that risks posed by the industry, such as environmental damage, are the same as those affecting the industry and its viability. Hence, broadly speaking, the approach to risk management is changing, and the necessity to manage risk is being incorporated at all levels.
The areas of sustainability and resource nationalisation have not often been seen as significant risks to manage in the past but are increasingly being discussed as problems occurring now and as a risk for the future (as discussed later). The efforts of the major players to change a widely held view that, by its nature, mining is not sustainable have suffered from the impact of events across the world. Mining, in almost any form, is generally thought to be detrimental to the environment and exploitative of sovereign assets. The resource nationalisation risks include security implications both politically and locally. Political threats often include foreign mines being used as pawns and therefore having high risks of operational interference from politicians and governments. Local threats include land squatters and villagers demanding compensation for both land and alleged pollution of the land around the mine site or illegal on-site mining activities of local population. These situations can often deteriorate into attacks and thefts and mining companies are therefore often urged to develop security risk management programmes to address these risks.
Security risk management programmes also typically include the identification and management of risks affecting the mine site in general – production and transportation of product; safeguarding staff villages or compounds; etc. Experience during the past few years has shown an increase in the number of attacks and hostage scenarios in the village compounds. In the vast majority of occasions, the taking of hostages has led to management relenting and providing access to the product storage areas and the subsequent loss of product. Both buyers and sellers of insurance have become more aware that what may have been a relatively straightforward property damage and business interruption claim in the past, may now have a far more complex characteristic and the risk engineering programme must, to a large extent, manage this, including a security risk management programme to assist in ensuring adequate contingency plans are established according to the local security risks and threats. Linked to these plans is adequate training of key personnel in order that contingency plans may be activated as required without undue delays.
Mining risk management is increasingly having to deal with current issues rooted long in the past, such as acid mine drainage/seepage, whilst also having to make provisions for the future. The requirements of environmental management programmes and mine closure legislation, are subject to change. Such changes are increasingly determining the type of operation and processes available to the mining company.
An example of this would be the inability of a new mine to obtain a permit to build a cyanidation plant. This forces the mine to keep an old but permitted plant open to process the new mine’s ore some 200km away. Consequently, new risks materialise in terms of property damage, machinery breakdown and business interruption, with transportation becoming a key issue in this example.
Those plants that do obtain permits to use the cyandisation process need to include the security risks associated with such process and incorporate the risks into the security risk management programme. It is not unusual for mines to suffer interference from local villager incursions into the tailings dams and areas around the dams; medical complications then experienced by the villagers leads to claims for compensation from the villagers concerned, often resulting in political interference of the mine operations.
The importance of addressing strict physical and electronic access controls to restricted processing and storage areas in the security risk management programme enables the mine to maintain accurate inventories of raw materials, explosives, product and the transportation of the same. The programme also provides for appropriate screening processes of staff entering and leaving product processing areas, providing further efficiencies in reducing losses through pilferage and/or wastage.
Both buyers and sellers of insurance have become more aware of the threats posed by flooding, and have taken appropriate steps where possible. The risks presented by fire, however, have (broadly speaking) decreased in line with the amount of timber used in underground mining and the fire loads both underground and on surface have been reduced.
Equipment and supplies logistics to remote locations often incur losses from wastage and pilferage en-route to the mine sites. The security risk management programme identifies the respective risks of the local conditions and logistics routes and provides adequate security risk management controls to improve efficiencies of the logistic supply routes and chains.