Borrow your toilet analogy:
1) Do you mean this multi-billion dollar project has only one toilet and does not have any backup at all? According to the announcement, there seemly are some other options, at least in a temporary basis. BTW, I have three toilet at home, but I still do it in the backyard sometimes, irrigating the flowering plants.
2) Can you explain why they shut down the mining operations which do not use that toilet at all?
NCM has some truly world-class assets, which attract many investors. However, it hit by one incident after another, either fatalities or geotech problems. Are they natural desasters or simple mismanagement.
I try to make a few comments on the management just on the basis of this incident along:
1) Poor judgement on the potential impact of the incident: If you look at the enlarged photo attached in the announcement, you can see the continuation of the semi-circle brown-grey bands near the bottom of the collapsed wall. There is no significant overflow of slurs or water.
From the first photo, you can see: (1) there is only a very small area in the dam that show free water (the small dark-coloured area in the middle of the dam); (2) judged by the steep cliff in the collapsed area, the taillings are well consolidated - are not even slurs.
Conclusion: There is zero chance that the 'slurs' (no water) will over flow the third dam and then zero chance to flow out of the site boundary. The incident was greatly exaggerated, indicating incompetent by the CEO and his team.
2) Poor management team: There is a problem with the geotech team. This is second major geotech incident and this incident indicates the problems with the dam design and/or construction management . Clay gravity dam most simple dam of all, but need to be careful about the slop and permeability of the materials:
First, the slope looks too step. The wall collapsed after some rainfall, just like a landslide. That looks like the cause for the collapse, nothing to do with 2.9 earthquake. Remind that, NZ and PNG may have a few such quake everyday.
Second, the materials used for the embankment may be too permeable. A thin permeable layer may cause the collapse of the wall. It looks like that crashed rocks (pale grey colored materials) are used. If this is the case, a clay liner on the inner surface of the wall would be recommended, but I do not see the liner.
Anyway, just vent a bit frustration. It's just a too easy decision for the CEO to suspend the whole operation. Is this suspended time included in the 'lost working hours' in the calculation for their bonus?
NCM Price at posting:
$20.60 Sentiment: Buy Disclosure: Held
