2002 Denver Annual Meeting (October 27-30, 2002)

Paper No. 5
Presentation Time: 9:10 AM


SCHMIERMUND, Ron L. and FILAS, Barbara A., Knight PiƩsold & Co, 1050 17th St., Suite 400, Denver, CO 80265, rons@kpco.com

Common practices affecting the design and implementation of environmental programs for mining projects compromise environmental stewardship and corporate governance, threatening the sustainability of the industry.

The timing and quality of environmental studies is critical to the objective evaluation of environmental risks and accurately determining short- and long-term operating and closure costs for inclusion in project financial models. Unfortunately, important studies are often commissioned only after a corporate decision to proceed with a mine has been made, which often results in unrealistic time tables and a bias toward supporting the apparent viability of the project. Risks tend to be down-played or even ignored, effectively pre-ordaining a favorable environmental outlook. Only after startup of operations is the bigger picture realized and environmental risks and costs fully understood and embraced.

Traditional approaches to environmental impact prediction are ill-suited to early and timely implementation. However, highly useful and insightful methods exist in the form of geo-environmental models grounded in the vast knowledge of ore deposits. As the conceptual model for a prospect evolves, geo-environmental models can be economically applied in parallel. Critical information is thus available early, helping to better focus required subsequent work on viable projects, or to avoid further investment in uneconomic projects.

Finally, a persistent tendency to minimize the gravity of environmental issues seems to cause cost, not quality, to be the primary basis for selecting contractors. Unrealistically low bids for contracted services are often based on perfunctory work scopes, excessive change orders, and inexperienced personnel. An industry-wide paradigm shift toward more realistic recognition of long-term environmental costs will result in higher quality services being the rule rather than the exception.