Rims Metals and Mining Session

Infrastructure/Logistical Networks' Risks:
What can Be Done?
How Can it Be Done? Why Should it Be Done?

A presentation at RIMS 2011, Vancouver May 2nd 2011
By F. Oboni, C. Oboni, Oboni Riskope Associates Inc.
(c) Oboni Riskope Associates Inc., 2011
Riskope International SA © 2009 www.riskope.com
1
April 20, 2011 Slide # 1

Cardio-vascular accidents
(stroke) have become one of the
major causes of death.
A cardio vascular accident
occurs when blood flow is
interrupted to part of the brain
(our very own IT system…), a
problem occurs in the heart...

2

Consider the heart as your extractive facility, and
the circulatory system as your transportation/logistic
network.

You probably have
learned to take good
care of your heart and
your blood vessels: is
the mining industry
doing the same for its
“circulatory” system?

3

For years we have taken care of civil systems’
digestive/waste “organs”. In the mining world these are:
process, tailings, dumps, contamination....

4

Then large companies have asked us to review
“supply chains” (e.g water, electricity, gas, acid etc.),
but never used to ask about “moving products away”.

The progression generally was:
Tailings, Slopes, Access Road.

We generally had to insist to
include for example:

Concentrate pipelines,
Wharves, Ship-loaders,
IT systems...
5

Other industries/organizations were
ahead of miners.

For example:

The Olympics in Torino were
concerned by their road network (in
and out of the venues),

CCC (jewels, perfumes) was also
very concerned about moving their
products out, as they have very
precise schedules, and have “Ali
Baba caverns” in seismic areas.

6

CCC Japan asked Riskope
in 1998 (three years after
Kobe earthquake) to
perform a

Logistic Platform Disaster
Recovery and Business
Resumption Plan Review.

7

some of Riskope's notes were:

-The plan is expecting a disaster to hit only during
regular business hours!
-The plan relies on a rosy scenario whereby major
Highways, RR infrastructure and power supply
(actually they had auxiliary power, but the tanks were
empty...)!! would be running!
-IT Servers were not mirrored by hardware located in
a safer region!

We sincerely hope they corrected their plans...these
common errors have proven critical 13 years later...
8

Remarkably not one of Riskope’s notes required
detailed knowledge of seismology.

People claiming one cannot anticipate an Earthquake/
Terrorist attack/Failure scenario (or any other hazard)
because they do not know enough details of possible
hazards are missing the point:

Disruptive events can be anticipated and planned in
sustainable ways by performing sensible risk analyses.

Detailed knowledge is needed, but at a later stage.
9

You do not go to the doctor and ask him about the
genetic structure of a virus or a disease. You ask him
how it might affect YOUR life (scenarios), then you
ponder if the “cost of vaccination” vs “reward” is worth
time and effort, AND, the chance of secondary effects.

10

Mining “circulatory” systems encompass ingress and egress, like
the human one arteries and veins, all the way from the heart to the
end user!

Miners seemed to privilege ingress studies, but to neglect egress
studies, contrary to other industries.

Modern transportation systems require effective risk management
decision tools to:
-help ensure critical transportation
operations' reliability
-ranking emergency alternatives
-allocating mitigative resources

11

Transportation, loading/unloading contracts with third
parties have the effect to make companies feel
“comfortable” that the other parties are taking care of
their risks....

YET

when reality kicks in, severe disruptions result from
major snowstorms, avalanches, volcanoes or defective
valves, gearboxes!!

Let's look at some examples:
12

Winter 2010-2011

13

Volcano (Island, 2010)

14

Production of iron ore, uranium and alumina have all
been disrupted in the first three months of 2011 by
Cyclone Yasi

15

A gearbox in the loading equipment failed on Jan. xx, at
which time YYY estimated it could take up to two
weeks to fix the
damaged parts
leaving the ZZZ
terminal
operating at
about half
capacity.

16

This 2010 ship loader collapse still requires
emergency (and costly) truck transfers to a wharf
500km away….

17

Examples of hazards capable of generating egress
disruptions:

-Earthquakes
-Hurricanes, cyclones and floods
-Man-made and Natural slopes, rock-falls
-Traffic and trackage, strikes
-Fires of forests, railroad assets,
-Dust, nuclear fall out, terrorism and organized
criminality...
-IT failures, ....
-Maintenance, human error…!!

18

Once the system potentially hit by disruptive event(s) is
studied, risks are ranked and checked towards
tolerability criteria.

it is then possible to effectively allocate mitigative
resources, select alternative routes etc. ($).

Not the other way around!

Without clear understanding of tolerability, you will
waste your money!

19

Budgets available
for risk analysis and risk-based planning of
hazard protection measures
for transport routes and infrastructure
is generally limited
because
of the false sense of comfort
brought by third parties contracts.

20

Important definitions like, for example,
Force Majeure,
are taken as granted boiler plate solutions, in the total
misunderstanding of what they do mean, and what they
will mean the day reality kicks-in.

All this while many people are starting to ask more
general questions, such as for example: was Katrina
really a natural disaster, or was it man-made, or man-
induced and to what extent?

21

On Jan 13 the FT published a short article explaining
th

how snow proofing UK's airports may force passengers
to pay higher fares if winters turn “permanently” colder.

22

Reportedly the “Arctic weather conditions” before Christmas
cost 37.7MUS$ in one week.
BAA said airlines “shared responsibility for the disruption as
they had agreed to a recovery plan that failed to account for
deep snow”.

Airlines needed to renegotiate the emergency plan, which
could lead to an increase in operating fees...

Needless to say BAA was heavily criticized for the
disruption.

23

Foreseeability, a key parameter in FM, indeed requires
the definition of a threshold likelihood: for example a
tornado in Salt Lake city was unforeseeable, by
scientific consensus, until one happened in 1999?!

24

The optimization of Force Majeure formulation, when
renegotiating contracts in the future, or for new
contracts, constitutes an important proactive mitigative
measure with very large ROI (Return On Investment).

25

There are numerous areas where optimization can take
place, for example under the form of a more detailed
explanation of terms, definition of threshold values,
definition of considered mitigative levels,
“common practices”
or “best practices”,
negligence.

26

Going back to our clairvoyant and planning oriented
clients, their business areas range from:

Torino 2006 Winter Olympic Games
Military
Food
Jewellers,
and lately, Mining
etc.

27

Modern transportation systems are complex and
therefore require effective risk management decision
tools.

These help to:

-rank alternatives, (literally hundreds)
-allocate resources, (how much is reasonable!?)
-avoid alternatives with major side-effects

the reason is in the following slide

28

As someone has said:

“The time to look for the emergency aisles and where
the exits are located is before takeoff, not after the
wings fall off the plane”.

We must always have a plan in place to deal with
unanticipated events,
a “just-in-case things head south” plan.

29

Ideally, one puts this plan together when you are
objective and unemotional and calmly contemplative —
not when things are figuratively and literally melting
down.
Or in the aftermath of an accident!

“The Problem is when we
don’t know what we
don’t know we don’t know.”

30

An ingress-egress study covers:

The links between two or more geographic points
allowing transit of goods, energy, information or
people by means of discrete traffic (roads, railroads)
or continuous flow (pipelines, channels, cables, fibre-
optics) linear facilities LF.

LF are running in increasingly more congested
transportation corridors and are becoming absolutely
critical to our society...remember the Cardio-vascular
analogy?

31

Certain equipment, such a specialized ore ship loaders can take
up to one year to replace.

Restoration time for port facilities, can be very long and
daunting....it's like being on a waiting list for a cardiac operation!

Finally, the destruction or damage of the IT assets (for example
Network Management Center) could also cripple the egress from
a mine,

and that's exactly why a European army has contracted us to
deliver a consistent and rational Risk approach (not an IT
approach! An information RM approach) for a whole country.

32

Although managers try to avoid “complex
mathematics”, hard numbers are crucial in
differentiating risks incurred, sometimes by hundreds of
components of a similar system (which can be
anything, from a road homogeneous segment to a
valve, a tank along a pipeline) leading to the need for
QRAs.

33

CS1: Seismic BI

34

35

Conclusion was to propose a B2B strategy whereby the
client would actually team-up with RR and buy
replacement bridges. Insurance could be reduced and
serviceability ensured in a far better way.

36

CS2: Multimodal/ multihazard logistical transportation
network

Production End
Ships to W zzzT Possible mitigation
Centre X User A
Routes
Export
XX B
%
pr
od
uc RR
tio
n
Tunnels and
Loading Bridges

Tunnels and Wharves End
Bridges
User C
Tunnels and
Ships to W zzzT Bridges
Production Centre Unloader
Y

37

Insurance can be cut in half. Authorizations and
agreements should be passed in view of possible future
occurrences.

38

CS3: Mine’s personnel shuttling: Air plane vs buses

Risk assessments can be used to help decide whether
a different transportation system would be better than
an existing one.

Several levels of analysis are possible, the top one
including CDA-ESM, an alternative comparison tool
which allows considering risks and avoids all the pitfalls
of NPV.

39

40

Infrastructure/Logistical Networks' Risks:

What can Be Done?
Once the system potentially hit by disruptive event(s) is studied evaluating the
limits of Force Majeure events, risks are ranked and
checked towards tolerability criteria.

How Can it be done?
Alternatives, emergencies routes are studied and ranked, including side effects.
Force Majeure clause from 3rd parties contracts should be (re)-negotiated and
sustainable solutions designed.

Why Should it Be Done?
-help ensure critical transportation operations' reliability
-rank emergency alternatives
-allocate mitigative resources
-faster understanding on the situation in case of a crisis situation regarding 3rd parties

41

The benefits
Create the basis to avoid
a slide into a crisis, by
proactively controlling
the situation.
Mind your heart and
your circulatory
system!

42

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