August 2008

Water works

The growing importance of water management practices: the next big showdown in mining?

By P. Pigeon

Ontario’s French River

As with the old-style Western movies in which cattle barons and townsfolk face off over the rights to a valuable stream, water might just be responsible for a modern-day showdown in the mining industry.

Mining operations can potentially have a significant impact on water supplies and their environments including: draw-downs of water tables due to dewatering, overall water use for processing needs and tailings disposal, denial of water for downstream uses such as irrigation and aquatic habitat, and the risk of water contamination through dissolved salts and metals.

Current factors are putting more pressure on mining companies to prioritize the requirement to focus on resolving their growing water concerns. Factors driving this trend include:

  • Global population growth, which has resulted in greater overall water consumption and use, including the demands of cropland irrigation and manufacturing.
  • Erratic weather and climate change that have led to water shortages in many parts of the world, leading to increased competition for each litre of water in a stream or watershed.
  • Escalating awareness of the need to protect dwindling natural environments, including the necessity to provide adequate watercourse volumes to serve aquatic species (an important food source for many people, particularly in the developing world).
  • Rising concern about the effects of mine-originated water contaminants on natural environments and on humans.

As a result of these factors, increasingly stringent environmental legislation in many parts of the world is placing a greater emphasis on the corresponding responsibility of mining companies.

Water is actually becoming a key competitive factor in the industry — those with judicious water practices are more likely to succeed, in part because they avoid the longer term problems that the poor management of this resource can bring.

The horse leading the cart

If there is a “horse” leading the cart towards improved water practices, it would be stricter governmental regulations. Both in Canada and worldwide, these are placing more constraints on company water management practices. Expectations are increasingly being codified, as seen in the new environmental, health and safety guidelines from International Finance Corporation, the arm of the World Bank responsible for project financing in developing countries. IFC’s Guidelines have also tended to be adopted by other financial institutions and serve as a good guide to expectations for corporate behaviour. Similarly, the Equator Principles — whose signatory financial institutions now control over 85 per cent of project lending worldwide — also illustrate a rising priority for environmental stewardship, including water policy.

There are practical concerns as well. For example, it is difficult for mines in arid parts of the world such as the southwestern United States to receive financing unless they have demonstrated that they have access to sufficient water in order to operate.

Non-governmental organizations are also helping navigate this cart to sustainable water management practices by means of their ability to focus worldwide attention on activities they consider to be examples of irresponsible development. Additionally, there is an increased scrutiny by financial backers who do not want to be associated with a project that is attracting unfavourable headlines on the environmental front.

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