Recent tailings failure in Mexico and Canada “justify expensive and time consuming permitting process”

A leading provider of “news and education on the copper market” is warning investors that because of the recent tailings facility failures in both Mexico and Canada, it is “more important than ever for investors to find evidence that companies are environmentally and socially aware.”

Just last week, a massive tailings dam failed at the Buenavista del Cobre mine in Canenea, Sonora, and dumped 40 million liters of copper sulfate into the Rio Sonora. Mexican authorities are blaming the mine’s owners, Southern Copper Corp., a subsidiary of Grupo México.

The Mexico News Daily reported Friday that Mexico’s environmental agency Profepa is blaming the mine’s operators for massive tailings release that was not immediately reported to authorities.

The News Daily is reporting that Arturo Rodríguez Abitia, assistant prosecutor of industrial inspection at Profepa, said the mine acted in a negligent manner for not having monitored the release of the contents of the tailings pond. He said Profepa will be looking to apply the highest penalty possible, which is about 3 million pesos, or $230,000.

Photo credit Twitter: @betoeliasm

In saying the mine was at fault, Rodríguez told the News Daily there should be control and emergency systems in place should a toxic spill occur, and the waste materials would be trapped by another pond to avoid being released into the river. Detection systems to warn of a problem should also be in place.

Local officials said last week that the mine made no attempt to notify authorities of the incident. The water commission was advised by a municipal president.

Businessweek reported early Monday that 88 schools in a northern Mexico state will not open because of the danger of water contaminated by the spill. The schools are expected to open next week after water quality tests have been completed.

Officials have distributed more than 1 million gallons (4 million liters) of drinking water over the past week using tanker trucks, reaching 80 percent to 90 percent of people in the area.

Grupo Mexico’s Buenavista mine is considered to be one of the largest porphyry copper deposits in the world, while the state of Sonora leads Mexico in terms of mined production of gold, copper, graphite and other products, Copper Investing News reports.

Copper Investing News also states that the disasters unfolding in Mexico and the Aug. 4 Mount Polley tailings dam failure in British Columbia, “[serve] as a reminder of why lengthy permitting and environmental approval processes are necessary for mine construction, and of why due diligence should always be an ongoing process for investors.”

Buenavista is a major profit center for Southern Copper’s operations. According to Grupo México’s 2011 report, the company plans “significant” expansion at Buenavista from the then current 180,000 tones of copper content to 480,000 tons of copper content.

Grupo México’s consolidated net sales for 2011 reached a record high of $10.443 billion, a 25% increase over the $8.338 reported for 2010. This increase is attributed, in part, to greater production by Buenavista del Cobre.

Juan Rebolledo, Grupo Mexico’s vice president for international relations, downplayed the impact, according to an online report in the Raw Story.

“The content of these acids is not toxic in itself,” he said on radio network Formula. “There’s no problem, nor any serious consequence for the population, as long as we take adequate precautions and the company pours lime into the river, as it is currently doing.”

The mine spill may have some near-term impact on mining production, according to Stockhouse.com.

Meanwhile in Canada, the B.C. Environment Minister Mary Polak told CBC News there would be an independent inquiry into the Mount Polley disaster. “British Columbians expect an independent investigation and they will get one,” Polak told CBC radio.