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14.04.2020 Business Features

Coronavirus: Temporary Care & Maintenance Status In The Mining Industry – Loss Control Measures

By Sethoga Lesiba (AGCS)
Coronavirus: Temporary Care & Maintenance Status In The Mining Industry – Loss Control Measures
LISTEN APR 14, 2020

Like many industries, the pandemic has forced mining companies to take extraordinary precautions to reduce the spread of the virus while protecting the health and safety of employees.

Many companies have implemented Care and Maintenance (C&M) procedures to temporarily discontinue operations, as maintaining them may no longer be possible.

However, invariably, this will also have a major impact on loss control measures, according to a new risk bulletin from Allianz Global Corporate & Specialty’s (AGCS) risk consultants.

Although, generally, temporary shuttering of mining operations is due to falling commodity prices, the decision to do so as a result of pandemic restrictions has been enough to force companies to implement temporary C&M procedures, which help to ensure safe cessation of operations – not only for employees but also for others who happen to be in the vicinity. A new AGCS risk consulting bulletin provides an overview of loss control measures for mining companies to consider when initiating C&M procedures.

“Many mining companies have withdrawn, or are in the process of withdrawing, most workers from their sites and temporarily transitioning mines to C&M status,” says Laurens van Eijk, Executive Risk Consultant and ARC Mining Expert Group team lead at AGCS. “A decision to put a mine on C&M will almost invariably have a major impact on loss control and risk control measures. Preservation of assets is a major concern for mining companies, financiers, shareholders and all other stakeholders involved. Good, fundamental management programs should not be weakened when the facility is under temporary suspension. To avoid potential losses, it is critical that actions are taken to protect the sites in a thoughtful and deliberate way.”

In the new bulletin, AGCS’ risk consulting experts highlight loss prevention measures for mine owners and operators, focusing on developing and implementing the formal C&M plan and the monitoring and inspection of mining works, infrastructure and mechanical and electrical equipment during shutdown, as well as the recommissioning of operations when the time comes.

Placing a mine on C&M – whether short-term or seasonal for no more than three months or for an extended period of time up to two years or even in “mothball” status for over two years – impacts both loss control and risk control measures, as the company looks to prevent personal injury to others or property damage while the project site is closed. To avoid potential losses, protective actions should be carried out thoughtfully and deliberately, by use of a C&M plan.

The C&M plan

The C&M plan, which should exist before closure commences, is a complex and formal document which spells out the procedures involved in suspending mining operations. Another aspect of the plan demonstrates that environmental obligations will be met not only during the closure activities but throughout the closure period. All mining projects should have a C&M plan in place already so that, even though coronavirus might have surprised them, it can immediately be implemented. A C&M plan is not to be used if the mine is closing operations for good, as closure plans take precedent then.

Generally, a C&M plan should establish measures to be taken to restrict access to the project site, all buildings and other structures to authorized personnel only and should spell out protective measures for mine openings, electrical systems, mechanical and hydraulic systems, chemical and biological systems, contaminated effluents, waste management systems, explosives and rock piles and tailings. Preservation of mining assets should be a main concern of the C&M plan for the mining company, financiers, shareholders and all other stakeholders.

The C&M plan should also include procedures to restart operations and should be accompanied by a formal emergency response action plan, should one be needed, including clear communication lines to ensure that emergencies or serious environmental incidents are handled appropriately and in a timely manner.

Preventive measures continue even during shutdown

Despite staff reductions and budget constraints, if possible, good, fundamental management programs should continue unabated while C&M measures are in effect, including hot work permit programs, smoking policies, fire equipment inspection and testing, housekeeping, security checks, etc.

Download the risk bulletin here.

All recommendations in the bulletin are technical advisory in nature from a risk management perspective and may not apply to specific operations. Please review any loss prevention measures carefully and determine how they can best apply to specific needs prior to implementation. Any queries relating to insurance cover should be made with local contact in underwriting and/or broker.

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