MAC: Mines and Communities

Nearly a hundred institutional investors demand mine dam disclosures

Published by MAC on 2019-04-08
Source: Pension Expert (2019-04-05)

The massive collapse of a talings dam at Vale's iron ore operations in Brazil, earlier this year, didn't just kill scores of people and is likely to have drowned up to 300 more [see: A tidal wave of mud: the Brumadinho disater ]

It also sent shock-waves around the world - both to mining companies and among those who invest in them.

Now, thanks to the Church of England Pension Board and Sweden's Council on Ethics, more than 600 of the former are challenged to provide full disclosure of how they are managing other such "facilities" under their control within forty-five days.

Then wha, we might well ask?

There's the likelihood of either a distinct dearth - or else abundant wealth - of data (some of it doubtless recondite) being offered by respondents to excuse themselves from taking radical action.

Let alone their closing down potentially catastrophic operations, once and for all.

Among the first companies in investors firing lines will be Rio Tinto.

It purportedly manages over a hundred dams.

And will be confronting shareholders, including investors, at its AGM on Wednesday this week

[Comment by Nostromo Research]

Church of England scheme gives ultimatum to mining companies

Stephanie Hawthorne

Pension Expert

 5 April 2019

 On the go: In the wake of the collapse of the tailings dam in
 Brumadinho, Brazil, which killed at least 84 people and left hundreds
 missing, 96 institutional investors have been stirred into action.

 In an urgent letter, investors, led by the Church of England Pensions
 Board, have given mining companies 45 days to provide full disclosure on
 tailings storage facilities under their control.

 It requests that companies publish the disclosure on their websites
 within 45 days and ensure that the disclosure is signed by the company’s
 chief executive or board chair.

 The letter, sent on April 5 to 683 listed extractives companies by the
 CofE Pensions Board and the Swedish Council on Ethics for the AP Funds,
 is supported by 96 investors with $10.3tn (£7.9tn) in assets under
 management, including Aegon, Aviva and Hermes. The engagement is also
 supported by the UN-supported Principles for Responsible Investment.

 Adam Matthews, director of ethics and engagement for the CofE Pensions
 Board and the co-lead on the investor mining and tailings safety
 initiative, said: “These disclosures will drive a new level of
 accountability and transparency within the mining sector and will form
 the basis of further interventions as investors continue our engagement
 following the tragedy of Brumadinho.

 “It is essential that investors can establish a clear line of sight on
which company has which tailings facility and how that facility is being
managed. The current disclosures from companies are largely inadeuate.”
The individual company disclosures will be scrutinised by investors as
they develop an assessment framework to profile each business on their
tailings management.

This is the second major intervention by international investors
following the Brumadinho disaster. The first intervention made a public
call to establish a new standard for tailings dams based upon the
consequences of failure with independent and public audits.

 Professor Upmanu Lall, chair of the Department of Earth and
 Environmental Engineering and director of the Columbia Water Centre at
 Columbia University, said: “Tailings dams are massive structures that
 store toxic waste. Even if they are well designed and operated, they
 have the potential to fail with catastrophic human and environmental
 impact.

 “Given the thousands of such sites, some failures are inevitable.
 Alternative mining strategies that are benign are needed. Monitoring,
 mitigation and accurate disclosure of these risks to investors and
 society is a primary fiduciary responsibility for mine operators.”

 

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