MINING / 16 Jan 2019
Environmental impact assessment in mining projects: integral part of risk management
At the start of any environmental impact assessment (EIA) process, there are some recurring questions that need to be addressed. Do we have enough baseline data? Do we have the time and resources for the necessary investigations? Has the prospecting work progressed far enough? Is the project ripe for an EIA? Or has it already passed the appropriate point for environmental and social impact assessment? As discussed later in this article, there are country-specific differences in the processes, but at the end of the day it is a question of whether the EIA and the technical and economic planning of the project are carried out holistically or not. The only way to achieve genuine cooperation in a project is through systematic and effective overall risk management.
A risk for the environment is also a risk for the project owner
Environmental risks and social risks have two dimensions. First, a project may cause risk for the environment and society. This dimension of risk, originating within the project and working from the inside out, is usually assessed in terms of probability and seriousness. While risks are related to exceptional circumstances, even normal operations can cause an environmental and social impact. The second dimension works the other way around: environmental and social factors can constitute risks for a mining project, namely project risks.
Unless we find efficient methods for managing those impacts and risks, the whole project may be in danger. For example, an acid mine drainage with high metal content may require the construction of costly and complicated waste disposal sites, discharge water management and follow-up arrangements. Another significant project risk can be created by hydrogeological flows between an important groundwater area and the mining site, whereby draining the mine may lower the water table and impact an important water supply. In such cases the project cannot go ahead because the amount of compensation would be enormous.
Identifying the risks in time
If a project risk affecting the environment or society is so significant that it impacts the viability of the project, it is important to collect all of the available information about that particular risk as early as possible. Developing a mining project is costly, and you have to be aware of any hurdles and limitations. Adequate impact management can be an expensive and time consuming process. It has to be possible to incorporate significant expenses and delays in the project finance model, even when they arise from environmental risk or impact management. To amass enough timely information about critical project risks, the process of risk identification must start well in advance and pinpoint the most critical risks. Uncertainties related to critical project risks must be cleared faster than other uncertainties.
EIA, permit applications and feasibility studies – a process
Various alternatives for project execution are investigated using technical and financial analyses and environmental and social impact assessment (ESIA). It is crucial to plan the timeline of feasibility studies and ESIA as one single process. Unless the technical and financial alternatives are analysed simultaneously alongside the environmental impact assessment, the latter will be nothing more than a formality that has no influence on project design.
There are various ways to conduct feasibility studies: financiers have a range of criteria for content and accuracy and companies can adopt various methods. Consequently, there is no universal way of optimally linking the EIA to the project. Moreover, due to country-specific environmental and minerals regulations, technical and financial analyses and the ESIAs must be linked accordingly.
Differences in EIA processes in Sweden and Finland
In Sweden, the first (land-use focused) EIA is conducted in conjunction with the application for an exploitation concession and the second (emission focused) in conjunction with the application for a permit pursuant to the Swedish Environmental Code. As the application for exploitation concession is submitted at an early stage, it is not easy to establish a smooth link between the technical and financial planning and the EIA process.
In Finland, by contrast, planning needs to have reached a mature stage at the time for applying for an exploitation concession. Then the application procedure for mining and environmental permits falls roughly around the same point in time. Thereby, there is one formal EIA procedure covering both applications, which must be completed before the application processes are set in motion. Comprising of analyses of various alternatives, the EIA process is a suitable complement to pre-feasibility studies, which are basically technical and financial analyses of alternatives. In conjunction with the environmental permit application, more detailed evaluation of the selected alternative takes place. It is a good complement to the feasibility studies performed for the project
The key to success
Systematic and methodical mining project risk management is crucial for a successful EIA. A detailed project development plan aligns the competencies needed for the various processes along the timeline ensuring well-founded and sound choices and decisions. Optimally, the formal EIA and permitting processes are integrated into the reporting and stakeholder platforms of the mining project.
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Senior Consultant, PhD
Services for Mining and Exploration
+358 10 33 49737