Due Diligence and Audits of Mine Waste Facilities ? The Basics

Mine waste facilities, and in particular tailings impoundments, are one of the highest risk aspects of any mining venture. There are far too many recent examples of how real and/or perceived physical or environmental impact from one of these facilities has had enormous economic impact on both the specific project and the overall parent mining company. In many cases, such dramatic impacts have followed a period where a due diligence of the mine had been carried out (e.g. in an acquisition, merger or similar) or an internal or otherwise audit had taken place. Consequently, it is suggested that there is a need for an audit/due diligence framework to assist those processes in terms of assessing mine waste facilities. This paper presents a recommended framework for completing either an audit or due diligence assessment of mine waste facilities under a number of typical scenarios. The framework will be of relevance to reviews carried out prior to mine construction, during operations and for mines that have been in a care and maintenance position and are to be re-opened. Concepts of risk management are introduced as an essential part of the recommended framework. The paper should be of value to current and prospective mine owners involved in stewarding an area of significant risk to viability of their mining venture. The paper should also interest prospective lenders to these ventures.