Geotechnical News • September 2018
27
WASTE GEOTECHNICS
Tailings management accounting
Should net present value be applied tailings management?
David Williams
Introduction
Large-scale mining projects are high
cost. In order to facilitate the financing
of new mining projects, the Net Pres-
ent Value (NPV) accounting approach
is applied, with a high Discount Factor
of typically 6 to 10%, several times
the inflation rate. At a 10% Discount
Factor, a 10-year delay in expen-
diture is discounted by 61%. The
NPV approach is extended to tailings
disposal (as it is to all other mining
and processing operations), result-
ing in the minimisation of short-term
capital costs, with rehabilitation costs
discounted by the same high Discount
Factor. For tailings, an inexpensive,
small surface tailings facility is
typically initially constructed, to store
tailings slurry delivered by robust
and inexpensive centrifugal pumps
and pipelines. While this produces
initial cost savings, small storages fill
rapidly, requiring frequent raises and
further storages, which are also typi-
cally small, to limit upfront costs. This
approach results in:
• Wet and soft tailings deposits, ex-
cessive stored water, and an ever-
increasing tailings stored volume
and footprint.
• An increased risk of tailings dam
failure, since the tailings typically
remain flowable.
• A blow out in operating costs to
avoid capital costs, with inevitably
increasing capital expenditure to
meet the ever-increasing volume
of tailings and water to be stored.
• Difficult and costly closure and re-
habilitation, typically delayed until
the end of the mine life when rev-
enues have ceased, discouraging
rehabilitation and leading to poor
land use potential and ecological
function.
While the use of NPV and an arti-
ficially high Discount Factor result
in apparent cost savings in tailings
management in the short-term, costs
and cumulative, unintended detri-
mental impacts rise over time, with
ever-increasing closure and rehabilita-
tion risks and costs in the long-term.
Larger initial tailings footprints may
enable the optimal cycling of tailings
disposal to improve tailings dewater-
ing, density and shear strength, and
subsequent rehabilitation.
Illustrative coal tailings example
Simple NPV analyses are applied to
alternative management and closure
approaches for coal tailings from open
pit mining operations in the relatively
flat terrain of the Eastern Australian
Coalfields. A mine life of 20 years is
assumed.
Tailings management options
considered
The conventional approach to coal
tailings disposal and storage in the
Eastern Australian Coalfields is the
pumping of the tailings as a slurry at
about 25% solids by mass (gravimet-
ric moisture content of about 300%,
about 85% water by volume, and dry
density of only about 0.30 t/m
3
, for
a typical specific gravity of about
1.80) using robust and inexpensive
centrifugal pumps, to a surface tail-
ings storage facility (TSF). The coal
tailings are typically deposited in the
surface TSF sub-aerially forming
a beach, and undergoing hydraulic
sorting according to particle size and
specific gravity, settling, consolidation
and desiccation of the exposed upper
beach. Clay mineral-rich coal tailings,
particularly those with even a small
proportion of sodium Smectite, may
not settle significantly from the input
% solids of 25%, and will not produce
clear supernatant water. Coal tailings
containing no Smectite will typically
settle to 50% solids (gravimetric
moisture content of about 100%, about
65% water by volume, and dry density
of about 0.65 t/m
3
) and produce clear
supernatant water for recycling to the
plant. Such coal tailings may eventu-
ally consolidate under the self-weight
of a high thickness of coal tailings to
between 65% and 70% solids (gravi-
metric moisture content of between
about 54% and 43%, between about
50% and 45% water by volume, and
dry density of between about 0.90 t/
m
3
and 1.00 t/m
3
). Exposure of the
surface to desiccation by the sun and
wind may increase the dry density to
about 0.83 t/m
3
.
As completed pits become available,
and the permitting of new surface
TSFs takes increasingly lengthy time-
frames and becomes increasingly dif-
ficult, completed pits may be used for
tailings storage. The coal tailings are
typically deposited in-pit at the same
25% solids by mass. The shape of the
pit results in a very rapid rate of rise of
