Resource World Magazine

52 www.resourceworld.com j u n e / j u l y 2 0 1 4 MININGWORLD Risky Business – investing and environmental assessment by Michael Setterington Natural resource development is a risky business for both the inves- tor and the developer. The rewards can be significant however, and a project's success, to a great extent, depends on the developer's ability to properly identify and manage risks. How a company handles the environmental risks a resource development project presents will determine whether or not a project is granted the permits necessary for development. What are the project's chances of obtaining the necessary permits? Their chances are greatly improved when the proper risk assessment tools have been utilized and a risk management strategy developed. Developers, by nature, are risk takers. They are willing to take a calculated risk assuming that the risk has been quantified and determined manageable. Generally, their level of risk tolerance is quite high. Regulators on the other hand are risk adverse. Project developers face regulators who look for risks – reasons a project should not be developed. Does the project impact fish, water resources, First Nations rights, socio-economics, greenhouse gas levels, wilderness, or species at risk? Ultimately, project plans will have to address regulator, public and First Nations environmental concerns before being granted development permits. Incorporating environmental risk management in the early stages of resource development projects is good business practice and, hopefully, part of the Canadian natural resource business cul- ture. It is the job of developers, regulators, scientist consultants and investors to ensure that risks are properly identified, assessed, managed and communicated before development proceeds. Risk Identification – Successful development projects are likely those that identified and dedicated the time necessary to plan for and manage environmental risk. Early scoping allows the collection of the information necessary to outline the risks in order to develop strategies to manage them. Risk Assessment – More complex development projects will require that all environmental risks be thoroughly studied. Professional environmental consultants work closely with developers to properly identify the envi- ronmental features that are at risk and to assess, manage and mitigate those risks. There are many tools available that can both quantify and qualify project risks to the environment. Risk Management – Developers must be genuinely willing to manage environmental risk. This includes managing the regu- lated environment (such as air and water) within clearly legislated guidelines, to managing the less tangible and quantifiable risks to wildlife and the sometimes subtle changes to animal distribution and movement. Developers have to commit to continued environ- mental risk management, to contributing to ongoing knowledge gathering. They must build environmental monitoring into their development plan and operating culture for both the duration of a project and beyond the life of a project. Communication – It is essential that environmental risk and how that risk was identified, assessed, and will be managed, be effectively and clearly communicated to the public and regula- tors. This will help the public to understand that natural resource development risks can be managed. Well published environment studies will go a long way to mitigate negative public perception due to past environmentally disastrous projects and the resulting opposition to resource development in many areas. Experience shows that properly assessed and managed development can occur with a limited effect on the environment. Communication has to be effective at technical levels, at the corporate level, and at the level of a concerned public. There are several well established environmental consult- ing companies in Canada in the business of environmental risk assessment for resource development projects. Environmental risk assessment is not cheap and it is not quick – it is an invest- ment. If you don't get the message that a company has developed a risk management strategy, you may want to invest your money elsewhere. n Mikael Setterington (BScF, MSc, R.P.Bio., CWB) is a terrestrial wild- life biologist for EDI Environmental Dynamics Inc. in Whitehorse, Yukon. He leads the terrestrial environmental assessment component on several large mining projects in northern Canada from Baffin Island to the Yukon/Alaska border. For more information contact msettering- ton@edynamics.com and visit www.edynamics.com Baffinland Iron Mines' Mary River Iron Ore Project, North Baffin Island in the Qikqtani Region of Nunavut. Photo courtesy Environmental Dynamics Inc.

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