Standards in the Mining Sector

On 16 August, 34 miners died at a mine in the North West Province of South Africa, shot by policemen after days of violence that had already seen a number of other deaths. The incident was a culmination of a disruption caused from a strike at the Platinum mine.  Since then, many have looked to lay blame at either the miners, government, police, mine management or even spiritual healers. However, incident analysis tools teach us that apportioning blame to an individual is the easiest, last and often least accurate root cause in an incident. To understand the reasons for a failure of the system is what any safety officer worth their salt in the mining sector looks to identify.

What causes one mine to recover from a disruption and another not, despite having similar disruptions is often buried within the systems, response and processes at either mine. Mine A recovers from a strike over pay with little fanfare and no impact on the local community, whereas Mine B suffers death, loss of community confidence and a halting in production. The answer to this is the same for this question as it is for why do two mines pulling from the same ore body, using the same local manpower and operating similar machinery have totally different safety figures? The system I hear you say, an organisation with an effective system, committed senior management, a well prepared and resourced response structure and a culture that understands, believes and lives the values found on the Mission Statement will manage any disruption better than an an organisation missing any one or all of the above.

At mine site zero harm through safety reigns supreme – above production figures, operating costs or life of mine. Next on the podium is then production and profit, however if you look at mining companies the world over from the “Juniors” to the “Majors” you will find varying degrees of emphasis given to business continuity. This is strange given that one of the threads that links safety and production is business continuity. Without understanding the impact on the business during a disruption you open yourself up to failure in both of your two most important issues.

Let’s take for example a disruption on the conveyor due to a maintenance issue. Until that issue is fixed ore will have to be trucked around the mine that increases the amount of human to machine contact as well as numbers of vehicles on the road. At times there aren’t plans in place to manage that change so decisions are made in haste and actions put into place. This disruption has not only increased your chances of having a safety incident, it has slowed production and increased the burden on your road network.

The question is how would business continuity have helped in this instance, by properly identifying your critical infrastructure and understanding the maximum tolerable period of disruption on an activity should have allowed a plan to be put in place for the conveyor. Its importance to the process would have ensured it was on the critical equipment maintenance list and was receiving regular attention. A plan would have been put in place to train operators in the manual handling of ore should they need to be used in the event of the conveyor go down. Finally an understanding of the timings could have allowed you to increase throughput to build a stockpile that would compensate for the likely period it would take to recover the conveyor.

Business continuity, or as some term it business resilience, is a phrase that is gaining significance and prominence in the mining sector, linked with emergency response, security, IT disaster recovery and incident management set the operational resilience of the organisation as a whole. Today a lot of the ‘Majors’ have teams that are responsible for business continuity either as their sole endeavour or part of their remit of responsibility. Large and significant events from environmental to political have necessitated the need for more attention to be paid to business continuity.

In June 2012 the International Standard for Business Continuity was released as ISO 22301. It outlines the business continuity best practice methods for the public and private sector. It is an international standard with similar maintenance and audit requirements as ISO 9001 or ISO 14001.

With the release of the ISO it gives the mining sector the opportunity to adopt all or elements of international best practice. “Do we need to be certified?” I hear you ask. The decision to certify to the standard or not will need to be taken by each organisation on its own merit probably based by weighing up the reward gain / necessity versus the resource commitment to obtaining and managing the standard.

Given the size and complexity of mining operations alignment to the standard is also an option. Alignment allows the company to cherry pick portions of the process it believes can bolster existing management systems. There are a lot of relevant and useful segments to take from the ISO and transpose on to mine site to improve safety and increase resilience in the process. This brief aims to point out, in a chronological fashion, components organisations looking to align themselves with business continuity best practices may consider to adopt.

Determining the scope of the business continuity management system

The first step of the process is understanding the scope to inform what is included and what is excluded in the management system. Understanding the scope enables you to allocate resources more effectively and ensure that those initial small issues have not slowly ballooned into major problems during a disruption. It also enables the management team to correctly apportion responsibility to relevant departments e.g. is a strike a HR issue or a BC issue and at what point does it transition from one into the other.

Understanding the organization and its context

The first heading of the ISO relates to the organisation and understanding the context or environment in which it sits. The standard stipulates that. “The organization’s activities, functions, services, products, partnerships, supply chains, relationships with interested parties, and the potential impact related to a disruptive incident.”

This is an extremely useful exercise that can be undertaken during an Executive Board meeting. The mining environment may exist have a life span proportionate to the ore body, but the context within which the operation exists can change rapidly. Political will changes, the discovery of a new resource attracts more and larger players into the market or even something as mundane as a fuel shortage all affect the mining environment. Unless the organisation is aware, identified and understood the impact those changes have, when those disruptions occur the mine will not prepared to deal with them. A useful tool to use to begin this exercise is the Business Impact Analysis.

Business Impact Analysis

The process of analysing activities and the effect that a business disruption might have upon them” is the definition given for this process. In lay terms it is an academic process that identifies the activities an organisation conducts that support the provision of its product. In a processing plant those would be all the activities that take place from the moment ore enters the processor to the moment product comes out at the other end for either further beneficiation or sale. The value of the BIA comes from assessing the impact not performing these activities have over time, prioritising their resumption time frames and finally identifying the resources and external / internal upstream and downstream dependencies on those activities.

The finished document is a dissection of the organisation that helps inform a number of other processes other than just business continuity. Segmenting the process in this manner even has benefits regarding process safety, by identifying portions of the process that may not initially seem dependent on each other. And realising that a lack of provision of a resource to that activity (as a result of a disruption) would have an impact on a significant portion of the process. The BIA is the foundation of business continuity and an effective method of assessing business impacts.

Business Continuity Strategy

One of the main outputs from the BIA is the development of the BC strategy. Again prior identification is vital, a strong BC Strategy will serve to allocate required resources and inform the strategic priorities during a crisis. Identification of these elements allows for appropriate resource allocation in a disruption as well as development of a critical maintenance schedule to manage resources and assets that impact on business continuity.

Management commitment

Top management have to understand the reasons behind business continuity and realise that as much as it is a vessel to guide the mine through a disruption it is also a catalyst that can be used to add value and gain competitive advantage over competition. Demonstrating having conducted the intellectual exercise of the BIA can be ustilised in a number of ways. It is a useful add to a Bankable Feasibility Study, or to take to insurers when renegotiating premiums or when seeking a claim settlement. It is also another tool use to identify project and country risk by demonstrating an understanding of the risk exposure of the organisation and subsequent mitigation measures.

Actions to address risks and opportunities

The addition of this section to the ISO is a very useful progression from the old British standard on business continuity (BS 25999:2006). It identifies that business continuity can and should provide opportunities and thus moving the contingency negative (in response to a negative occurrence) to the more contingency positive (exploitation of opportunities from an incident) of Enterprise Risk Management. This proactive step is of use in the mining sector not only to demonstrate viability to investors, but as resources become more finite and requiring newer technology with which to exploit them with, the organisation that has identified response to opportunity to enact those plans and take advantage of sector or competitor disruptions.

Incident Response Structure and Exercising

“Measure twice, cut once,” proper planning and preparation ensures when an incident occurs the organisation can handle the fallout. Which is why I have combined these two for discussion in this segment; all mines have a management structure. This structure may be slightly different to the one a mine requires to manage an incident, whatever the makeup, it has to be exercised.

What the ISO requires is that organisation be organised and have the infrastructure in place and prepared prior to the disruption so in that event the main focus is managing the incident and not deciding on who is not going to speak to the media. Therefore having assigned roles within an identified structure that is regularly exercised greatly increases the organisations capacity to respond to an incident.

Business Continuity Plans

The majority of mines have plans to mitigate identified risks and scenarios; they may be called disaster management plans or contingency plans. What the ISO provides, is a heading list for the plans to be used to ensure all the key information is captured. The single shortcoming of these plans is that they tend to narrow their focus. On either the emergency response components of the incident or the resumption of disrupted assets or resource flows. However as the world becomes smaller due to the constant feed and demand for news, actions at a remote mine can no longer be guaranteed to remain within the confines of that region let alone continent.

The large disruptions that occur at mines are of great interest to the global media, because they exhibit the most characteristics of a classic crisis. The incident is usually spectacular; mine collapse, explosion or strike and the impact transcends just the human story, but also has ramifications on local and possibly international markets. And they often are longer running and inevitably have some form of union involvement. All things that give the news editor a number of interesting stories to run over a succession of days.

These often operational level plans need to be elevated to tactical and strategic level. The question, “how would this impact our reputation” needs to be asked and a level of planning to address those issues completed.

Mines manage incidents on almost a daily basis, incidents that if left unchecked could spiral into a crisis. Recent events in South Africa or in 2010 with the bursting of the tailings dam and resulting toxic spill in Hungary have shown why it is vital to understand and to have that intellectual exercise of “how bad can this get” and “how will the actions of a 3rd party affect our reputation, revenue and ability to exploit our assets.” The cost of a disruption, both in human and capital terms can be large, far reaching and long lasting. Understanding business continuity and realising how an effective management system can improve the organisation’s ability to manage a crisis should be of strategic importance.

In Mariakana the strike went from being a business continuity issue to becoming a crisis the minute the first person was killed. Hopefully this brief has shown that there are many elements of ISO 22301 that the mining sector can look at and adopt. Regardless of the mine’s size or if the company is a “Junior” going through the feasibility process or a “Major” wanting to ensure the safety of your staff and assets, both segments can find relevant information within the ISO. Information that can help improve the day to day operation at site and in the boardroom and equip the organisation with the tools to stop disruptions becoming crises.

Authored by Needhams 1834 Consultants.