Page 58 - Advances In Productive, Safe, and Responsible Coal Mining

44 Advances in Productive, Safe, and Responsible Coal Mining

A company’s business model and resources can also have a direct and indirect
impact on defining acceptable risk. For example, if a mining company has marginal
capital resources and elects to open a mine that is capital intensive, it may absorb more
risk in its mine design and operational practices because it cannot afford to do more. If
the mine’s profit margin in low or negative, it may not have the resources to make
additional improvements. In this general scenario, the mine may not be out of com-
pliance with governmental regulations, but it may carry substantial risk through oper-
ational practices that indirectly motivate human error by making it clear to the miners
that the company lacks the resources to make additional improvements. The best
intentions in relation to zero harm are less likely to result in adequate risk management
when process and operational risk cannot be reduced by engineering, appropriate
infrastructure development, and equipment selection and maintenance. Without say-
ing anything directly about acceptable risk, companies define the prevailing sense of
what is acceptable in decisions they make and the approach they take to engineering
and operating any coal mine. If an underground coal mine has issues with gas intru-
sions that are outside the ability of the mine to control at the face, should the mine be
operated, even if management is verbally committed to achieve zero harm?
If a company defines minimum criteria for developing a coal-mining project using
internal rate of return (IRR) or return on investment (ROI) and the project team does
everything it can in designing the mine to meet or exceed the IRR/ROI criteria, but in
doing so, accepts greater-than-desirable risk, that risk is passed forward to the mining
operation. It may be poor-quality ground that does not lend itself to consistently effec-
tive controls, but it is essentially left to the operations teams to address even though it
could have been done more effectively with a more robust mine design or mining
method.
When there are regulatory or legislative barriers to entry in permitting a mine, there
will be an indirect application of acceptable risk by the government. For example, if a
government requires mining companies to develop a safety case to justify their control
of risk as a prerequisite for obtaining an operating permit, the government imposed
barriers to entry that are in part a reflection of acceptable risk. In jurisdictions with
fewer government requirements, risk that is not controlled in the permitting process
may be transferred to the mine operations versus being “engineered out” by design. In
some countries, this results in a limited number of large operators with better
resources. In other countries, the barriers to entry are less substantial, and depending
on market economics, industry can be populated with small companies whose miners
are likely exposed to the same generic risk as all other coal mines, but who are less
likely to have the knowledge and financial resources necessary to optimize opera-
tional risk management.

3.7 Regulation and legislation

Many of the daily activities intended to control unacceptable risk that occur in coal
mines around the world are defined by national, provincial, and state legislation
and regulation. In some jurisdictions, coal companies are expected to develop their