Environmental Regulation: Navigating Uncharted Waters
Involving environmental consultancies as companies feel the heat in accelerating the energy transition
If climate change is a shark, water is its teeth. The expression, first coined in 2016 and since used by the environmentalist movement, is today ever more relevant as global economies feel the heat in dealing with climate change.
Arizona is no stranger to water droughts. The Colorado River hit dire lows in May 2022, forcing officials to impose water cuts as the southwestern US faced its worst drought in over a millennium, with the outlook for the coming years only getting drier. In July 2022, Arizona’s Governor Ducey signed an unprecedented US$1 billion investment towards securing the state’s water future. “Water is a very big topic in Arizona as we are in a desert”, explained Steve Trussell, executive director of the Arizona Mining Association (AMA), adding: “The mining industry has been proactive and is on the forefront of water management”.
Mining is by nature a controversial industry. Challenges that emerge ahead of the project permitting stage, such as environmental impact, land reclamation and public scrutiny, are highly likely to keep environmental consultancies busy over the coming years. Water management is a key component analyzed before issuing mining permits in Arizona. Recurrent changes in regulations and swings in administrations in the past decade have made the process lengthier and harder to navigate for companies hoping to start mining activity. Consultants now present themselves as pilots for producers and explorers navigating the uncertain waters of mining permitting.
“Clearflow is a resource that the mining industry can leverage to optimize water reuse.” Jerry Hannah, CEO, Clearflow Inc.
Decades of unregulated mining activity in terms of water management have left scars on the Arizonian landscape that the modern mining industry has pledged not to reproduce. Mining in Arizona spans over three centuries, yet standardized environmental regulations did not appear until 1948, when the Federal Water Pollution Control Act - later revised as the Clean Water Act (CWA) - was passed. Scott Britton, director of Mining Plus, recalls: “30 years ago, water was a material that was to be managed with the objective to reduce costs as much as possible. Companies could evaporate tailing ponds or treat the water and discharge it into land and streams.”
Going forward, regulators, investors and the public will keep a close eye on ensuring that mining firms consider water as a precious resource from the first day of designing the project through to closure.
Arizona’s water management landscape thus looks drastically different today. An Arizona Aquifer Protection Permit (APP) is required for any facilities discharging pollutants to the groundwater, and the mining industry’s efforts to recycle, treat and use water more efficiently are coming to fruition.
“In Arizona and Nevada, we help early-stage exploration companies with their permitting strategy. Some Australian or Canadian companies do not always fully understand the rigor of the permitting regulation they are confronted with when they arrive in the Southwestern U.S.”
Andrew Harley, Mining Director, SWCA Environmental Consultants
A generational challenge, but one heralding opportunities
In a period where ESG goals are business priorities, with tighter water management regulations and increased public scrutiny on mining projects, opportunities are rife for environmental consultancies. Haley & Aldrich’s VP, Eric Mears, named water resource management as the key driver for growth for the consultancy, and Civil & Environmental Consultants’ mining director, Robert Livermore, saw a significant increase in demand for his company’s services: “Our water resources and civil practices have been performing well over the past year.”’
Parallel to scientific input, consultants play an ever-growing role when helping mining firms establish their social license to operate. Producers, developers and explorers alike increasingly rely on public-relations firm to communicate on their projects with local communities, investors and the public. For example, since 2015, the Resolution Copper mine is being opposed by the Apache Stronghold coalition, for which Oak Flat represents a sacred site. Adam Hawkins, president of public relations firm Global External Relations, touched upon the company’s role in helping clients achieving their social license to operate: “We help clients determining what messages appeal to the community, encouraging to build trust by communicating effectively.”
Environmental consultants can also act as a third party between mining firms and federal agencies to ensure the environmental feasibility of mining projects in Arizona. Most land in the Copper state is federal, where the delivery of permits can average between seven to 10 years. Eric Mears, added: “70% of the land in Arizona is federal, and this is where most mines are located. Federal agencies are preemptively denying permits or working to reverse favorable decisions.”
“The sooner clients start engagement and social license housekeeping, the easier their projects will be accepted in the long term.”
Adam Hawkins, President, Global External Relations
Resolution Copper, whose authorization to mine has previously been revoked, is such an example. More than a drawback to investment attractiveness, the regulatory framework can also be a legal minefield. “Obtaining new mining permits is challenging due to sensitivity around environmental concerns,” explained Randy Huffsmith, vice president of US mining at WSP.
Andrew Harley, mining director of SWCA Environmental Consultants, understands this challenge and helps early-stage exploration companies with their permitting strategy: “Some Australian or Canadian companies do not always fully appreciate the rigor of the permitting regulation they are confronted with in Arizona,” he said.
Companies need to rely on a science-based, data-driven and environmentally sustainable approach in order to obtain their mining permits; a thorny process, but an achievable and necessary one. “If the science is strong, and we have followed procedures correctly, then the legality of the project is strong,” Harley concluded.
Managing water consumption will continue to be one of the main challenges for Arizona’s mining industry, and will become costlier. The scarcity of the commodity highlighted by historic lows at the Colorado river in 2022 will force firms to come up with innovative solutions. To that effect, consultancies’ expertize in terms of decarbonization, reducing water use and achieving sustainability will be a vital help for mining firms in making their operations comply with regulatory and social standards.
Image courtesy of Dulcey Lima
“Underground inspections are not expensive compared to the risk of spill and damage it can cause. It will always be more expensive to clean up the environmental mess than it will to inspect the equipment year after year.”
Jeremy Fuller, COO, Code Steel Industrial Inspections