The next time a mining company decides against dry-stacking as a too-costly alternative to tailings ponds, its directors and shareholders may want to consider what a tailings pond breach could cost companies like Imperial Metals Corp. (TSX:III) or BHP Billiton Ltd. (NYSE:BHP).

Up until November 5, the August 4, 2014, tailings pond failure at Imperial’s Mount Polley copper mine had been the worst such breach at a mine in recent years.

It was eclipsed when two tailings ponds at Samarco’s large iron ore mine gave way, flooding the town of Bento Rodrigues, Brazil, with water and mine slurry. At least eight people were reported dead last week, and more than 20 missing and presumed dead.

The financial toll for BHP Billiton and Vale SA (NYSE:VALE), which are partners in the Samarco joint venture in Brazil, will not be known for some time.

But it is likely to far exceed that of the Mount Polley disaster, which has cost Imperial Metals $61 million to date in rehabilitation, according to recent financials, plus a full year of lost production and a single-day market capitalization loss of 40% following the news of the collapse.

The Samarco mine disaster was the second fatal dam breach in Brazil in little over a year. In September 2014, a tailings pond dam breach killed three people at another nearby mine, the Herculano Mineração.

“So within 14 months, you have two tailings pond breaches – multiple fatal tailings pond issues – and the regulators are in full crisis recovery mode,” said Cameron Stockman, North American business development manager for CEC Mining Systems, which recently built a new dewatering plant for a small mine just 25 kilometres from the Samarco operation. “Whether Samarco will ever come back online, who knows?”

Vancouver’s CEC is one of a handful of companies that specialize in tailings dewatering technology. It is currently building dewatering plants for two new mines in Mexico and Chile.

Source: Business in Vancouver - see full article