/ Tim Heffernan / 7 am Mon, Apr 22 2013
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  • Inside a mile-deep open-pit copper mine after a catastrophic landslide


    For the past few months I’ve been reporting a big story on the copper industry for Pacific Standard. It takes a broad look at how the global economic boom of the past decade, led by China and India, is pushing copper mining into new regions and new enormities of investment and excavation. (It’ll be out in June.) But a few days ago a very local event shook the copper industry, and I thought it would be neat to look at how a crisis at a single mine can ripple through space and time, ultimately affecting just about everyone around the globe.

    Above is a picture, from local news channel KSL, of a massive landslide at Bingham Canyon Mine, about 20 miles southwest of Salt Lake City.


    The landslide went off at about 9:30 in the evening on Wednesday, April 11. It was expected: like most modern mines, Bingham has redundant sensor systems (radar, laser, seismic, GPS) that measure ground movement down to the millimeter and give plenty of warning when a collapse is imminent. The mine was evacuated about 12 hours before the landslide, and nobody was hurt.

    But the scale of the landslide was a surprise. Approximately 165 million tons of rock shifted, causing a highly localized earthquake measuring 5.1 Richter. It damaged or destroyed roads, power lines, and other infrastructure, and a number of the giant shovels and dump trucks that move ore and waste rock out of the pit. (For gearheads, the shovels are P&H 4100s and the trucks are Komatsu 930Es. Bingham’s fleet includes 13 of the former and 100 or so of the latter. Here’s a fun picture showing the scale of a 4100’s scoop)


    First to feel the effect (other than the workers at Bingham Canyon, of course, who have been asked to take unpaid leave) was Rio Tinto, Bingham’s owner. Its stock opened lower the morning after the landslide, and its analysts projected that the company’s profits would drop 7 percent for this year, with ripple effects for some years after. Bad for investors, sure. But those losses, in turn, will mean less capital for Rio’s investments in its numerous other ventures, and since Rio is the third-largest mining firm in the world—if you live in anything like an industrialized economy, you use its products every day—the ripple effects spread far beyond Rio’s shareholders. A pinch in Rio’s supply lines will push up metal prices for everyone. (And in fact last Thursday, copper prices jumped up a bit, although the landslide was not the only factor.)

    After the landslide, Rio quickly invoked the force majeure protections in its insurance policies, which would allow it to cancel its futures contracts on Bingham copper and have its insurers cover the losses instead. But however those claims are resolved, there is no doubt that the insurers will soon be recalculating their actuarial tables. Landslides are a feature of pit mining (above is a picture I took from the bottom of the Bingham pit last October, looking up at one that happened a few years ago). But now it is clear that even the most advanced sensor systems can’t predict how big a slide will be. That uncertainty means insurers will have to raise their premiums. Again, the price effects will ripple through the mining (and the insurance) industry, and eventually spread out to affect all customers.

    And there’s a third dimension to the ripple effects of the landslide: time. Big mines like Bingham run on schedules that extend decades into the future. I was at Bingham to report on a huge development in the operations: a shift from open-pit to underground mining. The prep work, which involves digging more than a hundred kilometers of tunnel beneath the pit, began in 2011 and was expected to continue until 2023. Meantime, a big expansion of the open pit had gotten underway, timed to expose a big batch of new ore in 2017, just as the existing exposed ore ran out. And that new ore would have run out in—you guessed it—2023, just in time for the underground mine to start up. Now all that planning is scrambled. The pit expansion is on hold until the mine reopens. And as for the move underground, Rio Tinto hasn’t released an official statement yet, but all the prep work got buried by the landslide.

    The work is mostly invisible, being subterranean, but you can see the aboveground equipment at the bottom of the pit in a picture I took last year (above). Then match the distinctive, pale-grey trapezoid of rock on the pit wall above the equipment to the same trapezoid, visible center-right, in some of KSL's photos. The bowl-shaped depression, where the underground work is based, was completely filled in by rubble.

    In short, the events of a few seconds on an April evening in 2013 are beginning to move through the economy, and will reverberate for at least a decade. And who will feel the vibrations, if they know what to feel for? Everyone who uses electricity, telecommunicates, gets their water from a tap, or eats food raised by Big Agriculture. Wires, pipes, and fertilizer: that’s what copper is used for.

    I think we get too accustomed to abstract things, like changes in the federal interest rate or the pace of Chinese growth, shifting global markets. It’s good to be reminded that sometimes it's still the earth itself that shakes the world.

    / / COMMENTS

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    1. I stare at this scar on the earth every morning when I wake up to drink my coffee. It’ll be interesting to see with operations slowed/shut down if the air quality in the Salt Lake valley will be impacted at all. We had a terrible winter of inversion and this mine was recently approved to double the size of their operations over the coming decade. While I realize (and am grateful) that they power a large portion of our local economy, the quantifiable effects they have on our lives extend far beyond monetary. Thanks for this great write up.

      1. Even in winter they have water trucks spraying down the dirt. No the real problem is cars (of course), the oil refineries around Bountiful, and coal fired power plants, which there’s about three around the area (there’s the one downtown off the I-80, and a tiny one Kennecott has that doesn’t run much according to my dad).

    2. Interesting stuff. I thought the worst when I read the headline; I can think of no more terrifying way to go than live burial.

      Thankfully I got all my plumbing and electrical renovations done while copper was still somewhat reasonably priced; I’m curious to see where the cost will end up.

    3. Terrific in-depth post! On the upside, at least this mine wasn’t right next door to the ocean like a certain tin mine in Malaysia.  Also, the nice thing about insuring the physical integrity of copper mines as opposed to say, mortgages, is that they will not all fail at the same time- even if all the mines’ safety precautions are inadequate- unless they are very close together.

      1. I don’t think that I’ve ever seen a bigger WTF than what happens in that video.  Apparently no one who had anything whatsoever to do with the project has ever actually seen a body of water, let alone taken a pail and a shovel to the beach.

      1. Nah, there’s still too much copper in them hills for them to abandon it. Also I think the eventual plan is to turn it into a landfill then back into a ‘normal’ mountain.

        1. Or hive off the mine to a subsidiary which will declare bankruptcy and leave the taxpayers to clean up the mess?  

            1. IIRC, the company who makes the Oz plastic money is both cool and dodgy.

              On the one hand, I think they’re developing printable solar cells, which would be pretty damn sweet. On the other, if I remember right, they were sprung bribing foreign officials to sign deals with them over adopting their plastic money…

      1. The amount of copper in a modern penny is negligible. The reason to get rid of them is inflation and the fact that they are not worth anything anymore. 

        1. Really? Are you sure? I swear they cited landslides as a reason for ditching the penny in Canada.

    4. I’d love to see a video of the slide in action. That would be spectacular! I’ve flown over this pit on the approach to the SLC airport, and it really is an amazingly huge hole.

    5. WSJ an hour ago 


      NEW YORK—Prices of copper futures eased as Goldman Sachs GS -0.08% cut its price forecasts for the metal on mounting worries about economic growth in the world’s top consumer.The most-actively traded copper contract, for May delivery, recently traded down 1.75 cents, or 0.6%, to $3.131 a pound on the Comex division of the New York Mercantile Exchange. Futures were on track for their lowest settlement since October 2011, slipping deeper into bear-market territory.

      1.  A bit of a digression, but I find it amazing that a 7.7% expansion of China’s economy in 3 months is considered ‘disappointing’ and ‘slowing’.  It is one of the largest economies in the world, and at that ‘disappointing’ and ‘slowed’ rate will double in just over 2 years.  How is it that a huge economy doubling in 2 years is anything other than a dramatic increase?

        1. I think it’s 7.7% annualized rate over the past three months, or a bit under 2% for the actual three-month period. 7.7% every quarter, or 34.5% per year, would truly be awe-inspiring growth.

          1. Well, that would explain a lot.  2% is still pretty astonishing, really. This is why I am not considered an economist.

    6. It’s good to be reminded that sometimes it’s still the earth itself that shakes the world.

      This is interesting but the effect flooding in Thailand has had on hard drive prices was already a much more direct reminder.

    7. Interesting article. I always fine the time scale of mining ventures one of their most interesting components. Most things do not operate on scales such as these. I would say this incident is also a good illustration of why too much dependence on super large operations make the industry more risky.

      That said, while copper has a lot of legacy stuff it needs to still support, much of what was traditionally copper is being transitioned to other better materials. No plumbers I know still use it, rather the easier to work with bendy plastic stuff. Telecommunications are moving to fiber. Of course all that takes time, and existing will still need support, but about the only primary use that doesn’t seem to be evolving are power systems.

      1.  Where I am, a lot of folks (including me) insist on copper pipes when we have new work done. A lot of don’t want the “bendy plastic stuff” under our houses.

    8. “Landslides are a feature of pit mining”? That’s bullshit no matter how you interpret “feature”.

      1. A typical geotechnical assessment of a highwall will be based on a limited number of oriented-core drillholes, recognizing that there’s a tradeoff between the cost and time involved in study and the risk of failure. You can, and do, encounter surprises as you actually mine a pit, and these can force costly design changes. A pit of this scale will have a *lot* more geotechnical drilling done than most mines, and the analyses will be more sophisticated, but that still doesn’t preclude the possibility of nasty surprises.

        Besides the possible emergence of problematic geological structures that you just didn’t know about, there’s also the fact that highwalls are designed to a certain probability of failure using the available data. This isn’t civil infrastructure where those probabilities are vanishingly low either – a 5% chance of failure is acceptable. You compensate with monitoring, so you don’t kill anyone, but a mine operator does in fact accept a risk of a wall failure. It’s the only way to make money: if you had to design walls to 0.01% probability of failure, you’d never make any money at it… or if everyone had to do it, copper would cost ten times what it does.

        1. A lot of non-engineers don’t understand that it’s all probability games.

          Aircraft?  Designed to limit loads that the typical aircraft in service will never see.  However, every few years, a commercial aircraft still suffers structural failure.  The tail coming off that big Airbus in 2001?

          Ships?  Designed to withstand excess loads to those normally seen in service.  But several times a year, ships break up at sea.

          Buildings and bridges?  Same thing.

          You assess the risks and what you can mititate.  Making planes 50% stronger would make them 25-35% heavier, which would wreak havok upon fuel consumption and range.  And most plane crashes would still be due to pilot-flew-working-plane-into-ground.

        2. The interesting part here is what is the copper content of the slide area and the area revealed by the slide.  A LOT of material has been moved and the slide may entirely change the future production direction of the mine.

    9. Awesome post!

      But as has been mentioned, a large amount of the links are broken, could this be looked at?

    10. Excellent article. One thing I was wondering: what does it feel like to descend into one of these mines? Do your ears pop? Does the air feel heavier? Do you feel claustrophobic?

    11. It was interesting to look at the full resolution photos on Flickr. I could spot lots and lots of small landslides off to the side triggered by the main slide. Wonder if the shaking caused further structural weaknesses that could be the cause of another major landslide?

    12. Another example of “too big to fail?”  I get that economy of scale has advantages, at least in the short term, but then you get to experience these epic failures and magnified “ripple effects.”  Are these huge activities really worth it?

    13. a  penny  for  your thought  GOD, on  what  should we  do  NOW? U gave  us  PVC so we could use less  copper, but we had  so  much  we  put it in our  DOG food, just to keep the  market  propt UP. A shortage is what  the  bears  want but  the  BULL says we need  more  electonics and the sweat shops need more  work….for the children sake, do something.  the bad news  bears are selliong  us  short and the funny   thing  is  IF i  hasd a  nickel for every penny i pick up, AM i still,  one cent a head,   oh my what do we do  now>  

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