Wall Street and the risks of tailings dam failures

Wall Street and the risks of tailings dam failures

Mar 31st, 2016

Wall Street and the risks of tailings dam failures

Wall Street and the risks of tailings dam failures have been the object of numerous discussions in this blog. A bit more than two years ago we published this.

We included a review and a short video from a course we gave in Brazil (Minas Gerais) in 2013, two years prior to the Bento Rodrigues (Samarco mine) dam disaster.

We stated that “someone” would soon go to jail for a failed Tailing dams and presented other general observations.

An accident-stock value review for some recent accidents

We looked at different tailings dams failure such as Boliden’s Los Frailes in relation with the operators/owners stock value history. As expected it wasn’t pretty. We all remember other mining companies stocks being beaten by Wall Street, and markets in general, in the aftermath of a tailings dam failure. One memorable example was Placer Dome losing its freedom to operate after the Marcopper accident in the Philippines.

Wall Street and the risks of tailings dam failures

“History” of share value disaster in the aftermath of Boliden’s Los Frailes dam failure.

We can extend this example to BP Deepwater Horizon accident (2010) in the Gulf of Mexico.  I am sure anyone can easily find the time of the accident in the graph below or here.

 

BP Deepwater Horizon accident share value

BP Deepwater Horizon accident share value

Let’s now move fast forward five more years, and see what happened to the share value of BHP (BHP Billiton Limited (ADR) (NYSE:BHP)), co-owner of Samarco. It is impossible to determine, by observing the graph  when the Samarco disaster occurred (actual date was 5th Nov 2015).

Wall Street and the risks of tailings dam failures

BHP share value following samarco disaster

Difficult, right? So, let’s try with the other partner of Samarco, Vale SA (ADR)(NYSE:VALE): any luck here?

Vale share following samarco

Vale share following samarco

Of course one can think: BHP and Vale are giants, so Wall Street did not flinch. Thus we decided to look at the owner/operator of Mount Polley’s, Imperial Metals Corp (TSE:III).

Mount Polley Imperial mining share value

Mount Polley Imperial mining share value

The stock graph displays at least another time when the value dropped as in the aftermath of the accident for reasons unrelated to a tailings dam failure (inbetween march 20th and the 20th april 2012).

One example not enough? The graph below shows Duke Energy’s share value following the Dan River Coal Ash Spill (2014). No dip, no fuzz… even more puzzling!

Duke Energy Dan River Coal Ash Spill share price

Duke Energy Dan River Coal Ash Spill share price

 

More questions!

So, many questions arise when discussing Wall Street and the risks of tailings dam failures.
Are the markets becoming desensitized to tailings accidents?
If so, why?
And if so, what has triggered this process?
Is the world becoming so concerned with wars and terrorism that the environmental damages from tailings failures look less significant than a decade ago?
Is the failure of a tailings dam becoming simply an opportunity for politicians to showcase their leadership?

What is your opinion?

 

 

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Category: Consequences, Uncategorized

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