For every gram of usable metal several grams of waste are left behind. Each year the mining industry produces 12.7 billion metric tonnes of waste known as tailings, making it the largest waste stream in the world. Tailings consist of ground rock, unrecoverable and uneconomic metals, chemicals, and water. Mining companies store this waste in large dams

Materials released due to failure of these tailings dams have significant social and environmental impact… Since 1915, over 250 failures have been recorded with over 2500 fatalities.  This has led to the release of 250 million m3 of contaminated tailings. Nearly a third of the world’s mine tailings are stored within or near protected conservation areas.

…and represent a liability for miners, impacting profitability and share price Since the Brumadinho accident in Brazil, Vale has spent cUSD10.4bn in reparation and has provisions of another cUSD6.6bn as of 2024. On the day of the failure Vale’s share lost almost USD20bn in market cap (25% reduction). 

Tailings failures are increasing in frequency and severity. Increasing global demand for metals, declining ore grades, and associated increases in mine waste has contributed to an uptick in the footprint of tailings and the number and severity of tailings disasters.

As well as a risk to be managed, tailings waste also represents a source of lost economic opportunity the estimated value of metals contained within tailings dams is thought to exceed US$3.4 trillion. Tailings are also an attractive opportunity to ease geopolitical concerns about critical minerals security.

Source: VisualCapitalist

While tailings dams have similarities to water retention dams, their economics differ. A dam built to retain water is the final product. It is an asset that generates value, e.g through producing electricity. Resources used to build  the dam are an investment in the asset. 

Historically, tailings have been viewed as an unavoidable cost in the operation of a mine. Valuation models of mines have incentivised minimising short-term investment to create tailings, spending just enough to comply with local government regulations. (More here)

This has often led to the lowest-cost tailings production methods to be used where tailings are thickened  just enough to be pumped to a tailings dam as a ‘slurry’. This is a cost-effective option in the short-term but results in increased water usage, and sometimes a less stable tailing dam compared to other more expensive processes.

Short-term cost savings have often come at the price of increased risks of failure and rehabilitation leading to higher costs over the whole lifetime of the tailings dam.

By identifying opportunities to create value from tailings, innovators can flip the value equation and enable tailings management to become more profitable and lower risk

Deals: 24 Organisations, $218 Mn capital invested, 108 deals, 

Most active Investors: Prelude Ventures (4 deals); CycleCapital (4 deals); Chyrsalix (4 deals)

Top geographies: US (9 organisations); Canada (2 organisations); Australia, New Zealand and UK (2 organisations each)

Increasing pressure on miners to manage tailings: Investors managing more than $25 trillion plan to challenge mining companies not committed to tailings dam best-practice standards and may vote against management at upcoming annual meetings. Insurers are also making cover more difficult to obtain and more expensive.

Funding from end customer collaborations: Rio Tinto and BHP have entered agreements to jointly identify a portfolio of tailings management partners to reduce footprints of tailings storage. Regeneration is a similar collaboration of investors, innovators and miners. 

Customers contending with a wave of compliance. Customers are contending with a significant volume of compliance since the release of the new Global Standards on tailings management. Innovators helping to alleviate this pressure either directly, through their solutions, or indirectly, by creating additional budget for management will be well received.

Who is liable? - Attempts to repurpose tailings are not without risk. There is question of who is responsible if something goes wrong - the original creator of the dam or the innovator helping process the tailings. ‘Good Samaritan’ laws reduce this risk, but, generally innovators are shifting their focus away from old tailings to tailings being produced today.

Inability to Identify early adopters - Identifying customers taking a longer-term view on tailings management is key. These customers are willing to stomach higher short-term costs to co-develop solutions, in the interest of lowering overall risk and total lifetime cost of tailings.

Inability to secure non-dilutive grant funding (Hardware start-ups) Making metals is capital-intensive. Market leaders - particularly in hardware -  have relied heavily on government funding. In the US, the Inflation Reduction Act has enabled billions of funding through the Dpt Of Energy (DOE) and Dpt of Security (DOS). Our analysis of grant data suggests companies outside of the US will struggle to secure as much support.