THE ENGINEER OF RECORD

In April of 2015, I had the distinct pleasure of delivering a talk at the New York city’s chapter of the Society of Mining, Metallurgy and Exploration.  The occasion was their annual conference on Current Trends in Mining Finance.  My talk was a bit different than the others, as it didn’t directly pertain to mining finance.  Indirectly, yes.  The title of my talk was, “The Role of the Engineer of Record in Mine Waste Stewardship”.  The intent of my talk was to help investors and financiers appreciate the concept of an Engineer of Record (EoR).  Below, you will find a slimmed down version of the talk I gave:

Instead of getting to the point, I’m going to spend a couple of minutes going over some background information.  No sense just jumping right in when I have a whole 12 minutes, right?  Like Abe Lincoln said, if I had only 6 hours to chop a tree down, I’d spend 4 hours sharpening my axe. 

First things first.  Let’s talk about the very basics of a mining operation.  Ore.  What is ore?  Ore is the material coming from the mine pit or underground workings that has economical value.  If it isn’t ore, it is waste, and it goes in a waste rock facility.  The ore on the other hand, is sent to a mill, where it is crushed and pulverized and chemicals are added to liberate the gold/silver/copper/platinum or whatever is being recovered.  The left over pulverized mass is sent, usually in a mud-like slurry form, to the tailings facility.  Some mines also have a heap leach facility, which can be used to process lower grade ores. 

So, a tailings dam.  What is a tailings dam?  It can be a little like a water storage dam.  Most of us have seen these around.  They are pretty common.  But a tailings dam doesn’t have to look like a water dam at all. 

Why are tailings dams so different?  Many times, a tailings dam has the convenience of having the tailings deposit itself acting as part of the dam.  That is, if the tailings are shown to have enough strength to play their role as being an integral part of the dam.  A cross-section through a tailings facility can be really simple, or it can be really complicated.  The design, analysis, construction and operation of these facilities can run from being really simple to really complex.  And many of these facilities are operated for years, or even decades, and the construction of these facilities can go on for years or decades.  The more complicated a facility is, the more care it should receive. 

But here is the issue.  No matter how much better the industry and the engineering community have gotten, and no matter how sophisticated our material testing becomes and how our computer programs are becoming better and better, no matter how stringent the regulatory and various guidelines have become, we still suffer from an unacceptable number of failures—globally, about 2 per year. 

Okay, we now know some of the basics of a mining operation, and a little about tailings facilities.  Let’s discuss the EoR.  What is an EoR?  Most people would agree that the design engineer is the EoR up until the point where the design is permitted.  At this point, the mine is under no particular obligation to retain that engineer for the construction or operation monitoring.  This is very similar to an architect.  The architect designs your house, and it gets permitted.  You may never need to use your architect again, and you may never need the services of any architect again.  If things go well with a tailings facility you may never need an engineer again, just like with the architect, but with tailings facilities, that may not be a very safe position to place yourself in.   

Let’s have another example of an EoR.  Think of it as being similar to having a primary care physician.  Not everybody has a primary care physician.  Some people are so healthy that they take control of their own health requirements.  Some people go to their primary care physician only once a year, for their annual physical.  Others go more often, especially if their health has more issues.  In some cases, you can add a chiropractor, a podiatrist, an orthopedic guy, and on and on.  There is no one-size-fits-all answer to how often a person should see their primary care physician, and the same can be said of an EoR.  And actually, there is no obligation to retain the same engineer to be your EoR.  It may and may not be necessary or appropriate.  But there is also value in consistency.  For example, I’ve changed dentists many times over the years.  I bet it would be better for my dentist to have years of observations of my dental health so it can be seen how the health of my teeth are changing over time.  I lose this when I change dentists so often.  For example, my new dentist told me that I need a night guard.  I said “why?”  She said “you grind your teeth”.  I said “no I don’t, my wife would tell me”.  I bet it would be better to have a series of x-rays over time so I could know for sure if I grind my teeth.  I lose that opportunity when I change dentists.

A lot of things can affect a person’s health, and not all of those things result in a catastrophe, just like every visit to your doctor doesn’t end in a determination of a fatal health condition.  But, if we are looking at a very special case where somebody is especially prone to ailments or injuries, at the very least, wouldn’t you want them to have a primary care physician?  Maybe more, and maybe much more? 

So let me give you an example.  Let me tell you a story from my experiences whereas the EoR, we helped an owner overcome some really difficult situations at one very special facility.  How did we do that?  Well, let’s find out…

At the time when this story takes place, this tailings facility was the largest gold tailings facility in the world.  It was over 300 feet high, and held 22 million cubic meters of water on it.  How much is 22 million cubic meters?  About 6 billion gallons.  Billion, with a B.  That’s enough water to fill Yankee stadium 60 times.  That’s a lot of water, trust me.  The perimeter road around the outside of the facility ran nearly the distance of a half marathon, and it was also a very complicated facility.  And it was also pretty close to some population centers.

Now, we had a really good relationship with the owner of this facility.  Almost a partnership, and as far as I can recall, any advice I ever gave them, they followed.  And I gave them a lot of advice over the years.   Like I said, it was a really complicated facility.  During one of our routine visits, we noticed some cracking that wasn’t shouldn’t have been there.  Because of our really close relationship with the owner of this facility, which allowed us these frequent visits, we felt that we had caught this event very soon after it began.  And that was very fortunate.  What was the event?  I’ll get to that. 

We began an investigation almost immediately and took actions that changed the way tailings were being deposited into the facility in an attempt to avoid additional damage to the facility. 

Because to the complexity of the facility, we had a couple of university professors friends visit the site.  One of these professors remained a resource to us as the event was analyzed and remedied. 

We did a lot of work at this facility because of this event, including installing a lot of drains, which were constructed to lower the phreatic surface (water table).

The event was a significant deformation.  Not a failure, but a pretty significant deformation.  The crest of the facility slumped about 6 feet, and the toe kicked out about the same amount.  That means that the top of the dam dropped six feet.  We installed a lot of instrumentation on this area of the facility to keep an eye on what was happening.  Had we not been given the opportunity to catch this event early, and take the necessary corrective actions, this may have been a much more significant event. 

At the toe of the facility you could actually see where power poles were shoved around.  This was a pretty tense time to be involved, but fortunately with our quick actions, our investigations and analyses we were able to provide the guidance needed to avoid anything catastrophic.

We all succeeded at this mine because we had a close partnership with the owner.  We all knew what was at stake, and we all knew what had to be done.

And what I don’t have time to discuss today, is that this was far from the only issue we had to address at this facility.  And because of our strong relationship, and in our capacity as the EoR, we were able to help the owner get through some really difficult issues. 

So back to our parallel.  And specifically, as investors and financiers, why would you want to have an EoR at a facility like this?  Now obviously, just like with health care, just having a good health care provider helping you doesn’t guarantee good health, but it greatly improves the odds of having good health.  And the same may be said for a tailings dam.  Having an EoR certainly doesn’t guarantee the safe performance of a tailings facility, but it certainly improves those odds.  

Now, maybe more specifically, an EoR isn’t just an service provider who has a long-term relationship with a mine site.  Ideally, the EoR is involved with the design, construction, operational monitoring, periodic inspections and is informed of changes to the operation and management of the tailings facility, so that they may judge whether such changes may impact the facility, and whether additional changes should be made to improve the performance of the facility.

Whew!  That was a lot of blogging!

That’s all for now.