Chemical and Biomolecular Engineering - Theses

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End date: 2009 × Start date: 2000 × Subject: accounting × Subject: metallurgy ×

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    Improving the sustainability of mining waste management
    HART, BRIONY CLAIRE ( 2007)
    The thesis examines the issue of minimizing large, long-term tailings management liabilities and preventing those liabilities from being bequeathed to taxpayers. It commences by questioning whether demand for metals is likely to wane and thus render the issue moot, finding that demand is likely to increase; combined with declining ore grades the issue of tailings management will become more prominent. The public’s perception of the industry has resulted in an imperative to attend to sustainability issues that has begun to be addressed with managerial tools. Technical approaches for tailings management were examined, concluding that improved disposal methods are indeed available but are not utilized, largely due to the initial capital expenditure required despite potential long-term cost savings and risk mitigation. The possibility of mandating technological solutions through regulations is considered, as well and non-regulatory approaches for achieving environmental outcomes. The example of the United States illustrated that regulation is reactive, expensive, often ineffective and focuses on minimum requirements rather than best practice. The politicized nature of mining can render it difficult to for governments to proactively manage environmental impacts despite the fact that the environment is essential for society’s longevity. The global nature of the industry is highlighted, further emphasizing the weaknesses of regulatory controls, particularly through under-resourced developing country governments; international environmental regulations are unlikely to eventuate. International environmental law is nascent; the most promising advances in environmental management have been made under voluntary initiatives. There are few mechanisms to ensure transnational accountability. The crux of the thesis lies within the examination of current financial reporting requirements; such requirement were found to perpetuate short-term managerial attitudes by requiring arguably arbitrary discounting of long-term liabilities. The emphasis of accounting standards on legal liabilities is a disincentive for best practice implementation. Accounting standards sellers promote market-based measures for the convenience of investors despite the possible adverse consequences of industry failing to accurately quantify and be held accountable to long-term environmental costs. Market-based measurement objectives promote under-evaluation of liabilities by requiring the inclusion of third-party-related factors. It was shown from case studies that standardized methods of estimating actual future tailings remediation costs are possible, supporting the development of an industry-specific accounting standard to address long-term cost management issues. Finally, an improved financial assurance mechanism is proposed to ensure that the mining company sets aside actual funds in a trust for closure; financial reporting auditing requirements could be combined with financial assurance verification to ensure that adequate provision is made for closure. By requiring the accurate estimation of and provision for future remediation costs, financial reporting and assurance requirements will promote the uptake of more sustainable tailings management procedures.