August 1997
Report summary
Some current and past gold-mining operations in New Zealand have tailings dams that could potentially pollute the surrounding land and water for many years after the mine closes. We do not have the legislative power to require mining licence holders to pay for any monitoring and maintenance of these structures after the mining licence expires.
Commissioner's preface
For many years New Zealand's mining legislation and minerals policies have promoted mining, a not surprising focus given the importance of mining to our past and ongoing economic development; however it has only been within the last 16 years that legislation and policies have enabled the effects of mining activities on the environment to be considered in the licensing process. In the current transitional provisions of the Crown Minerals Act, there are no provisions to ensure that long-term effects of existing tailings dams are effectively managed after the mining licence expires.
Executive summary
Open-pit mining produces large amounts of waste material such as tailings and waste rock that need to be safely stored to prevent long-term damage to the environment from leachate, land instability or other hazards. Management of the long-term environmental effects of tailings dams is the focus of this report. Some of the issues relating to managing long-term effects also apply generally to the use of land for disposing of materials that are hazardous or have the potential to become hazardous.
The investigation was initiated in response to a complaint received about the long-term risks to the environment associated with tailings dams. A report of the previous Commissioner (Golden Cross Mining Project Environmental Impact Audit, 1988) raised the issue of the need for financial assurance for monitoring and maintaining tailings dam sites after the expiry of a mining licence and rehabilitation of the site. The Resource Management and Crown Minerals Acts have been enacted since then, and the administration of mining licences has been split between central and local government. The environmental conditions of mining licences granted under the old Mining Act 1971 are now monitored and enforced by regional councils.
This study, therefore, investigated a complaint, followed up on some of the recommendations in an earlier environmental impact audit, and assessed the effectiveness of legislative and administrative changes on the management of the environmental effects of tailings dams, particularly in the long term.
It involved site visits to three of the four tailings dams in New Zealand, discussions with mining companies, government departments, local authorities, community groups, iwi and experts in geotechnical engineering and mining law, and extensive research into the management of tailings dams in New Zealand and overseas.
With the exception of the Tui mine, none of the existing mine sites with tailings dams have reached the closure stage, although one is likely to close within a year. The timeframe in which to establish financial assurance mechanisms for the long-term management of existing tailings dams is in some cases too short to build up the necessary funds. However, the costs may be reduced if ongoing and final rehabilitation is effective, and the acid-producing potential of the tailings and waste rock is low.
The risks to public authorities and the environment are where bonds have not been required, where unforeseen events arise during the operation phase which increase the cost of rehabilitation beyond the amount in the bond, or where the licence holder abandons the site and the rehabilitation costs exceed the amount in the bond. The management of such risks and the potential impact on public funds are issues that both central government and local authorities need to address.
Findings & recommendations
Findings
Benefits, risks, costs
- The benefits are short term relative to the potential environmental risks and costs, and to the length of time tailings dams will exist.
- The long-term risks to the environment from tailings dams will be site-specific and include the potential for dam failure, and contamination of land and water by acid leachate. There may also be risks to the values and traditional relationships of tangata whenua with their ancestral lands, water and waterways, and other taonga.
- The Crown faces the risk of ultimately being responsible for the clean-up and management of a tailings dam site that is abandoned (becomes an 'orphan' site).
- There are long-term costs to communities and future generations which may inherit adverse effects from tailings storage facilities.
- There are short- and long-term costs to local authorities who have environmental monitoring responsibilities under the transitional provisions of the Crown Minerals Act and under the Resource Management Act.
Transitional legislation and funding issues
- Bonds or monetary deposits provided by licence holders need to be sufficient to ensure completion of the rehabilitation requirements of the mining licence. It is important that they are regularly reviewed, particularly when unforeseen circumstances arise.
- Mining licence holder 'polluter pays' obligations currently end when the mine site is rehabilitated.
- Mining licence bond or monetary deposit arrangements to cover rehabilitation of tailings dams are currently not available for the post-closure management of environmental effects.
- There is no provision in the old Mining Act or in the transitional arrangements of the Crown Minerals Act that requires the licence holder to carry out or fund any post-closure monitoring and maintenance of tailings storage facilities.
- There is a range of funding options for post-closure management that could be provided for in legislation. The option of a trust fund, for example, has a number of benefits for the licence holder, the consent authority and the local community.
The new regime
- Future mining operations will come under the Crown Minerals Act/Resource Management Act regime, under which the management of environmental effects of mining activities could be addressed in regional and district plans and/or resource consents.
- General parameters governing activities that are likely to have an effect on the environment can be established in regional and district plans. Rules in plans may prohibit, regulate or allow future mining operations having regard to their actual or potential effect on the environment.
- Under the Resource Management Act 1991 (ss 108(1)(b) and (6)(c)) a resource consent may include a condition requiring that a bond be given in respect of the performance of one or more conditions of the consent. The bond may explicitly provide that the consent holder is not only liable for any breach of conditions before the expiry of the consent, but also for any adverse effects on the environment after the expiry of the consent.
- The proposals for dam safety legislation require some clarification on the method of classifying hazards, and how the proposed amendments to the Building Act will apply to long-term risks posed by existing tailings dams.
- Some tailings dams are likely to fall within the definition of 'contaminated sites' in the current proposal for legislation dealing with liabilities in relation to such sites. It is important that these proposals also clarify responsibilities for continued monitoring and maintenance of sites which have the potential to adversely affect the environment in perpetuity.
- Establishing a risk assessment methodology would enable resource consent applicants and consent authorities to apply a consistent approach to assessing new mining proposals, as well as identifying post-closure risks from existing tailings dams.
- A code of practice for managing tailings dams would provide guidance for licence or consent holders and consent authorities.
Recommendations
The report makes a number of recommendations for improving the post-closure, long-term management of tailings dams. For the full text of the recommendations please refer to the main report.
To the Minister for the Environment:
- legislative changes that enable local authorities to require mining licence holders to meet the costs of post-closure, long-term management of the environmental effects of existing tailings dams
- amend to the Resource Management Act to enable local authorities to impose a consent condition requiring a trust fund for the long-term management of a tailings dam
- develop a methodology for assessing long-term, post-closure risks to the environment associated with tailings dams
- assess the risk of tailings dam sites being abandoned, and determines whether additional measures are necessary to protect the Crown from liability for future clean up costs
- provide guidance to local authorities on the liability of a consent holder for any adverse effects on the environment after the expiry of the consent.
To the Minister of Internal Affairs:
- address dam safety in the proposed amendments to the Building Act 1991:
- hazard classification for tailings dams that includes consideration of the potential harm to the natural environment
- controls that reflect the potential effects of catastrophic dam failure, and the long-term contamination due to seepage and escape of acidic tailings
- make the owner of a tailings dam responsible for the safety, monitoring and maintenance of the dam structure
- clarify that the legislation will apply to existing dams.
To local government:
- When considering consent applications for future tailings dams, ensure that:
- any accompanying assessment of effects on the environment (AEE) addresses risks to the environment and how they are to be managed
- local and community knowledge of natural hazards and instability of the area in which tailings dams are to be located are properly considered, along with any technical information.
- regional or district plans to:
- identify prospective mining areas which are considered unsuitable for locating tailings dams and should be regarded as prohibited activities
- identify areas where acid mine drainage is likely to occur and the controls necessary to avoid long-term adverse effects on the environment
- identify the objectives of site rehabilitation
- include environmental performance standards for discharges from tailings dams
- identify restrictions on future land use of tailings dam sites
- identify how rehabilitation and long-term management costs of future mining projects are to be estimated
- regularly review bonds or monetary deposits to assess whether they are adequate
- assess the financial risks to themselves of having to carry out long-term monitoring of tailings dam sites
- require mining licence holders to submit a residual risk assessment with their closure plans
- enter into negotiations with existing mining licence holders to ensure that an adequate funding arrangement is put in place for the long-term monitoring and maintenance of existing tailings dams.
To the mining industry:
- mining companies progressively rehabilitate their mine sites during the operation phase
- develop a code of practice for the long-term management of tailings dams.
