Total Cost Evaluation Related To Mining Waste Management Practices

The financial implications of environmental liabilities are becoming staggering, particularly for mining companies. The Environmental Protection Agency's (EPA) Record of Decision (ROD) list for Superfund mining sites has some pretty hefty financial commitments, such as the $10 million operable unit remedy for the Yak Tunnel at California Gulch (in Colorado) or the $40 to 60 million remediation at Bunker Hill (in Idaho). These costs are driven by the large volume and areal extent associated with historical waste management practices at mining sites. (It's difficult to have a low-cost remedy for a 20-square-mile site.) Unfortunately, there are other ways of generating environmental liabilities besides Superfund, such as non-compliance with Clean Air Act provisions, stormwater permits, or National Pollutant Discharge Elimination System (NPDES) permits. In the last 2 years, EPA has increased enforcement in its regulatory programs, which has resulted in increased fines and criminal actions. Leaders in other industries (primarily the chemical and manufacturing industries) are viewing environmental liabilities as a strong motivator to select engineering approaches carefully based on technical, legal, economic, and philosophical perspectives. Industry interest in waste minimization programs comes from the concept that it is economically advantageous not to create waste in the first place. Waste minimization programs typically balance increased front-end capital investment with the minimization of potential long-term environmental liabilities as a way to achieve the lowest total-or life-cycle-cost. A side benefit of waste minimization programs is that they tend to improve overall regulatory compliance. Waste management practices are also becoming philosophical, as evidenced by a May 11, 1992, Business Week article: Companies that incorporate innovative thinking on sustainable development will do more than clean up or prevent their own pollution. They'll make and distribute a product more efficiently than ever, worry about its lifelong environmental impact, plan for recycling, and get their suppliers on the bandwagon. This type of approach will require a new mind-set, new tools, and adjustments throughout the organization. A key aspect of waste minimization or life-cycle waste management programs is the incorporation of environmental costs into economic analyses that compare various waste management alternatives. However, the incorporation of environmental costs into an economic analysis can be more difficult than initially thought. As noted above, new tools-or even a new toolbag-are needed, such as new accounting methods that track and assign the true lifetime environmental costs of a particular product. One piece of the new toolbag is life-cycle cost analysis, which is discussed in this paper. To simplify the discussion, this paper looks at the total costs associated with a given mining site. The concepts presented in this paper, however, can be applied to any mine waste management decision. The ultimate extension of life-cycle costing, as presented in the Business Week article, is to include the potential environmental costs throughout the life of a metal. At this point, I am perplexed on why, let alone how, to include the potential downstream environmental costs (i.e., the costs associated with smelting, manufacturing, use, and recycle or disposal) throughout the life cycle of mined copper, lead, or zinc.