Risk Management Strategies for a Mining Company

The assignment content discusses various risks associated with mining, including death due to machine breakdown, environmental risks, landslides, floods, snow, strong winds, cloud bursts, fire, forest fires, famine, legal and contractual issues, operational disruptions, lack of modern machinery, reputational damage, loss of clients, loss of key personnel, inadequate functioning, and attacks from wild animals and humans. The content also highlights the importance of medical treatment, health officers, weekly medical checkups, accidents, criminal activities, terrorist activities, government responses, protests, and theft of machinery.

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RISK MANAGEMENT PLAN
(insert name of Business )
This plan is based upon AS/NZS 4360
– Risk Management.
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Contents Page
Table of Contents
1.0 Introduction and Context...................................................................................................3
Busindess Name and Description...............................................................................................3
1.1 Background Scope.............................................................................................................3
Background................................................................................................................................3
Detail Activities of the Business.................................................................................................4
1.2 Organisational Details ( Company , Management Structure and Staffing......................5
2.0 Definitions..........................................................................................................................6
Risk.............................................................................................................................................6
Risk Assessment.........................................................................................................................6
Risk Management......................................................................................................................7
Risk Reduction...........................................................................................................................7
Risk Treatment...........................................................................................................................7
Risk Transfer..............................................................................................................................7
Risk Acceptance.........................................................................................................................7
3.0 Stakeholders in Risk Management Plan.............................................................................8
RISKS..............................................................................................................................................8
4.0 Risk Identification...............................................................................................................8
5.0 Assessing Potential Risk...................................................................................................10
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Table 1: Consequence Matrix...........................................................................................10
Table 2: Likelihood Matrix........................................................................................................11
Table 3: Level of Risk................................................................................................................12
Table 4 : Risk Register................................................................................................................9
References:..................................................................................................................................16
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1.0 Introduction and Context
Busindess Name and Description
Fortescue Metal Groups Limited is one of Australia’s iron mining companies. The company is listed on the
Australian Securities Exchange and is financially very powerful(Fmgl.com.au. (2017).
The context is developed to run a risk mnagament programme in a real life situation with Fotescue as its
background.
(As an example…the context within which this plan has been developed is to develop
and run a successful ( Buisnbess ) , ensuring at the same time the patrons, the
property and environment are protected from damage and the business provides a
positive contribution to the community.
1.1 Background Scope
(An overview of the business should be provided here…which creates an image in
the readers mind and sets the scene for the rest of the document. The following
headings should be used as a guide to describe your event)
Background
Risk is an inherent part of mining activities carried out by the mining companies like
Fortescue. Fortescue is an Australian iron ore company, which has its headquarters in East
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Perth with its main mining projects at Chichester Hub, Cloudbreak, Christmas Creek, Solomon
Creek and BC Iron. Fortesue while carrying on mining activities comes under the influence of
several external factors like weather changes and landslides. The company often comes under
the government authorities due to accidents in its mines, which are responsible for injuries
and deaths(Li et al. 2014).
Detail Activities of the Business
Fortescue is a mining company which engages in large scale iron mining in five
locations Christmas Creek, Solomon Creek, Chichester Hub, Cloudbreak and BC Iron. The
compnay is one of the largest iron mining companies in Australia and the world.
Environment: What are the location/ and the layout of the ptremises?
Fortescue carries out mining in Christmas Creek, which is located in Western Australia in the
Chichester Range. The Cloud Break Mine is also situated in the same region. The two iron
mines have facilities of onsite processing of iron ore once mined. The area is also provided
with railway services owned by Forterscue, which allow the metallic commodities loaded
upon ships. As far as the social environment is concerned, the creeks are holy places to the
local people. The political environment of the area is disturbed by struggle over Land rights.
Solomon Creek is the third mining facility owned by Fortescue at the mouth of the
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Susquehanna River and the terrain is experiencing formation of rocks. The mining activities of
Fortescue in these creeks are impacted by acid drainage from the acid mines. The other
minerals present in the creek are manganese and aluminum.
Activities requiring permits? (ABLIS Web Site at https://ablis.business.gov.au/pages/home.aspx
Fortescue is involved in mining activities which require usage of explosives, blasting rocks and
other hazardous methods. Mining of iron ore results in use of surface water and pollution.
Thus, mining activities require permits from government bodies like the Australian Business
License and Information Services(Ablis.business.gov.au. 2017). The Environment Protection
and Biodiversity Conservation Act 1999 also requires all the activities like mining to obtain
approval from the ministry of environment, Government of Australia(Business.gov.au. 2017).
Not acquiring permits for works can attract legal and financial actions against companies
from the government’s side.
1.2 Organisational Details ( Company , Management Structure and Staffing
Fortescue Metal Group Limited is a public limited company listed on the Australian Securities
Exchange. The organisational chart of the company shows that it is led by the chief Executive
Officer, chairman of the board, lead director and the other directors. the operations
department, sales and marketing department, external relationship, corporate services and
law, business development, finance and secretary, corporate affairs and secretary and the
CFO, all report to the CEO.
As far staffing is concerned Fortescue employs both on role and outsource employees.
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Fortescue employs around twenty five thousand employees of various capacities like
mechanics, engineers, labourers and miners.
2.0 Definitions
Risk
Risk refers to future uncertain or unexpected situation which may result in loss of capital, human resource or
material. Risks are usually caused by external environment factors and the companies normally have very little
or no control over the risk causing factors. Fortescue is involved in iron ore mining and requires using of
hazardous methods like blasting to get iron ore. This exposes the people at the sites around the mine to
various risks, which have resulted in accidents, deaths and loss of productivity(Pandey, Agrawal and Singh
2016).
Risk Assessment
Risk assessment refers to identification of hazards, analysis and evaluation of risks involved and determine
appropriate ways of eliminating the hazards. If the hazardous factors cannot be eliminated, the companies like
Fortescue try to reduce them(Garcia et al. 2017).
Risk Management
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Risk management refers to the cultures, processes and structures, which companies undertake to reduce the
risk factors and take advantages of a market situation. The iron ore mining companies try to increase their
production of iron ore using more advancement technology and reducing the possibilities of accidents( Zhang
et al. 2016).
Risk Reduction
Risk reduction or loss control refers to reduction in the frequency or severity of losses, accidents and damage.
Risk reduction techniques may involve initiatives like use of engineering, fire protection apparatus and safety
management. Companies involved in hazardous activities invest huge amount of money in technology and
training staff members to reduce loss due to accidents(Verdejo et al. 2016).
Risk Treatment
The selection, development and implementation of risk treatment strategies and controls are called risk
treatment. Risk treatment requires participation at all the three levels namely upper, middle and lower levels
in the organisations.
Risk Transfer
Risk transfer refers to contractual shifting of business risks to one party to distribute the resultant losses. For
example, the organisations insure their fixed assets like expensive machinery to transfer the risks to insurance
companies.
Risk Acceptance
Risk acceptance refers to acknowledging the presence of risks in certain areas like mining. The companies who
are involved in carrying out mining activities also arrange to minimise these risks totally.
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3.0 Stakeholders in Risk Management Plan
(Detail all agencies, organisations and businesses who are involved in preparing and
providing input into the Risk Management Plan. Indicate who was involved in the
consultation process)
The stakeholders involved in preparing risks management function of Fortescue Metal Group are the apex
management, the middle level employees and the lower level employees. The external stakeholders to
Fortescue’s risk analysis management included the shareholders’ shareholders, clients and labourers. The
labour contractors and the suppliers of raw materials are important organisational stakeholders of the
Fortescue. The business organisations like security consultant firms are the other important stakeholders. The
government and the environmental bodies are the important key stakeholders who impact the functions of
Fortescue.
The security consultant firms, the sub contractors and the employees were involved in the consultation
process.
RISKS
4.0 Risk Identification
The areas identified in the Risk Management framework have been identified under the following
categories:
(It is expected that the following risks will be assessed as part of the process,
however this list should not be considered a complete list…there will be some which
are specific to your event such as drowning if your event is held on a reserve which
has a lake).
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0
Health /injury /diseases.
Epidemics
Accidents
Criminal activities
Terrorist activities
Protests
Government crackdown
Theft of machinery by illegal identities
Death due to machine breakdown
Environmental risks
Landslides
Floods
Snow
Strong winds
Cloud burst
Fire
Forest fire
Famine
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legal/ contractual
Operational
Lavck of modern machinery
Reputational promotional
Losing of clients.
Loss of key personnel
Inadequate function
Attack from wild animals and human beings.
5.0 Assessing Potential Risk
Once risks are identified, they are evaluated on a 2 dimensional matrix using
a qualitative rating of the likelihood of the event occurring and the scale of the
possible consequences. When risks have been identified, they are analysed
by combining the consequences and likelihood to produce a level of risk. This
form of evaluation provides a good graphical representation of how serious the
risk is or where it lies within a group of risks. The risk analysis provides
information critical to determining what risks need to be treated and what risks
are accepted.
The following matrices have been utilsed for the assessment
process;
Table 1: Consequence Matrix
Level Descriptor More Detail Injuries Financial
Impact
Operational Impact
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1 Insignificant Low Impact, low profile None <$1000 Little impact <1 hour
2 Minor Public embarrassment,
low impact and low news
First Aid <$1-10,000 Inconvenient delays
1hr-1day
3 Moderate Public embarrassment,
Moderate news item
Medical
Assistance
<$10-
$50,000
Significant delays
1day – 1week
4 Major Loss of production capabilities,
public embarrassment, 3 rd
party action, high news impact
Extensive
Treatment
<$50-
$150,000
Non achievement
certain aspects 1 wk-1
mth
5 Catastrophic Public embarrassment, 3 rd
party action, high news and
impact
Deaths +$150,000 Non achievement of
objectives +1 month
Table 2: Likelihood Matrix
Level Descriptor More Detail As a guide…
A Almost certain Is expected to occur in most circumstances Once in a year
B Likely The event will probably occur at least once Once in 3 years
C Possible The event might occur at some time Once in 10 years
D Unlikely The event is not expected to occur Once in 30 years
E Rare The event may occur only in exceptional
circumstances
Once in 100 years
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Likelihood
1
3
Table 3: Level of Risk
Consequence
1
Insignificant
2
Minor
3
Moderate
4
Major
5
Catastrophic
A
Almost Certain High High Extreme Extreme Extreme
B
Likely Medium High High Extreme Extreme
C
Possible Low Medium High Extreme Extreme
D
Unlikely Low Low Medium High Extreme
E
Rare Low Low Low High High
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PBH/842 - Doc. No. D10/38215 9
Table 4 : Risk Register
Date:……… Compiled by:………………..…...
Function/Activity: …………………………….. Reviewed by:…………………..… Date:……..
Category Risk Consequnces Likelihood Existing controlsco0ntrols Consequence Likelihood Level of Risk
Moderate Health /injury
/diseases.
Public
e
mbarrassment,
Moderate
news item
Almost certain Yes Heavy Hi
gh
Moderate Epidemics Public embarrassment,
3 rd Almost certain Yes Heavy High
Major Accidents Loss of production
capabilities, public
Almost certain Yes Heavy Extrem
e
Catasthropi
c
Criminal activities Public embarrassment,
3 rd Almost certain No Heavy High
Catastrophi
c
Terrorist activities Public embarrassment,
3 rd Almost certain No Heavy High
Minor Protests Public embarrassment,
low impact and low news
Almost certain No Heavy Extrem
e
Major Government
crackdown
Loss of production
capabilities, public
Almost certain No Heavy Extrem
e
Moderate Theft of machinery
by illegal identities
Public embarrassment,
Moderate news item
Almost certain No Heavy Mediu
m
Major Death due to
machine breakdown
Loss of production
capabilities, public
Almost certain Yes Heavy High
Major Environmental risks Loss of production
capabilities, public
Almost certain Yes Heavy High
Major Landslides Loss of production
capabilities, public
Almost certain Yes Heavy Extere
me
Major Floods Loss of production
capabilities, public
Almost certain Yes Heavy High
Minor Snow Public embarrassment,
low impact and low news
Almost certain Yes Heavy Low

PBH/842 - Doc. No. D10/38215 10
Major Forest fire Loss of production
capabilities, public
Almost certain Yes Heavy Mediu
m
Major Loss of key
personnel
Loss of production
capabilities, public
Almost certain Yes Heavy Extrem
e
Minor Attack from wild
animals and human
Public embarrassment,
low impact and low news
Rare certain No Heavy High

PBH/842 - Doc. No. D10/38215 11
6.0 Evaluating and Treating Potential Risks
Table 5: Risk Treatment Schedule and Plan Compiled by:……..…….………..
Date…….……
Reviewed by:……………………..Date……..……
Function/Activity:………………………….
Risk Possible Treatment Options Preferred Options R
isk
Rati
ng
B
Risk Rating
AFTER
Treatment
Cost/benefit
Analysis
A: Accept
B: Reject
Person
Responsible for
Implementation
Time-table How will it be
monitored?
Health
/injury
Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical checkup
Epidemics Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical checkup
Accidents Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical checkup
Criminal
activities
Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical checkup
Terrorist
activities
NA High injured people need
to hospitalized
Government
Protests NA NA NA NA NA Government NA NA
Governme
nt
NA NA NA NA NA Government NA NA
Theft of
machinery
NA NA NA NA NA Government NA NA
Death due
to machine
NA NA NA NA NA NA NA
Environme
ntal risks
Rescue of people
trappedd
Medical treatment of
injured
0 1 A Rescue team Yes Weekly medical
checkup
Landslides Rescue of people
trappedd
Medical treatment of
injured
0 1 A Rescue team Yes Weekly medical
checkup
Floods Rescue of people
trappedd
Medical treatment of
injured
0 1 A Rescue team Yes Weekly medical
checkup
Snow Rescue of people
trappedd
Medical treatment of
injured
0 1 A Rescue team Yes Weekly medical
checkup
Forest fire Rescue of people
trappedd
Medical treatment of
injured
0 1 A Rescue team Yes Weekly medical
checkup
Loss of key
personnel
Hospitalization on
urgent basis
Recruitment 0 1 A Rescue team Yes Weekly medical
checkup
Attack
from wild
Treatment as per injury Medical treatment 0 0 A Veterinary
surgeon
yes Weekly medical
checkup

7.0 Risk Action Plan
For those risks that are High, Extreme or deemed to be unacceptable, they need
to be evaluated and specific action plans need to be developed to manage the
risk appropriately.
Table 6: Risk Action Plan Table
(Example of Risk Action Plan relating to “Marquee Collapse”)
RISK ACTION PLAN
Item 1
Risk Marquee Collapse
Summary (RECOMMENDED RESPONSE AND IMPACT)
To ensure that the Marquee Installer completes an inspection checklist, submits it to the event
organiser and to develop a procedure to have the marquee dismantled in the event of
unacceptable wind speed, to ensure that the risk of collapse is acceptable.
1) Proposed
Actions
Reduction of accidents at the Fortescue sites, reduction of loss of men
2) Resource
Requirements
Modern automatic machinery requiring less human involvement
3) Responsibilities Securities officer, WHS specialization
4) Timing Continuous basis
5) Reporting/Monit
oring
Apex management

Appendix 1 Template of Risk Register
Risk Register Compiled by:………………..…...
Date:………
Date:……...
Function/Activity: ……………………………..
Reviewed by:…………………..…
Category
Risk
What and how can it
happen
Consequence Likelihood Existing Controls
Conseq
uence
Rating
Likeliho
od
Rating
Level of
Risk
Insignificant Injuries, falling down,
tripping
Minor injuries Almost
certain
First aid Less
Minor Minor bruises Minor injuries likely Hospitalization Considerab
le
Moderate Sprain while escaping Injuries Possible Hospitalization High
Major Death Very dangerous Likely Hospitalization Very high
catastrophic Death, injuries of
workers
Out of the control of company rare No arrangement Very high
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA
NA NA NA NA NA NA NA NA

Appendix 2 Template of Risk Treatment Schedule
Risk Treatment Schedule and Plan Compiled by:……..…….………..
Date…….……
by:……………………..Date……..……
Function/Activity:………………………….
Reviewed
Risk Possible Treatment
Options
Preferred
Options
Risk Rating
BEFORE
Treatment
Risk Rating
AFTER
Treatment
Cost/benefit
Analysis
A: Accept
B: Reject
Person
Responsible for
Implementation
Time-
table
How will it be
monitored?
Health
/injury
Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical
checkup
Epidemics Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical
checkup
Accidents Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical
checkup
Criminal
activities
Medical treatment Medical treatment 0 1 A Health officer Yes Weekly medical
checkup
Terrorist
activities
NA High injured
people need to
Government
Protests NA NA NA NA NA Government NA NA
Government
crackdown
NA NA NA NA NA Government NA NA
Theft of
machinery
NA NA NA NA NA Government NA NA
Death due
to machine
NA NA NA NA NA NA NA
Environmen
tal risks
Rescue of people
trappedd
Medical
treatment of
0 1 A Rescue team Yes Weekly
medical
Landslides Rescue of people
trappedd
Medical
treatment of
0 1 A Rescue team Yes Weekly
medical
Floods Rescue of people
trappedd
Medical
treatment of
0 1 A Rescue team Yes Weekly
medical
Snow Rescue of people
trappedd
Medical
treatment of
0 1 A Rescue team Yes Weekly
medical
Forest fire Rescue of people
trappedd
Medical
treatment of
0 1 A Rescue team Yes Weekly
medical
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Appendix 3 Template of Risk Action Plan
Table 6: Risk Action Plan Table
RISK ACTION PLAN
Item
Risk
Location/Function
Summary (RECOMMENDED RESPONSE AND IMPACT)
6) Proposed Actions To install modern accident proof plants
7) Resource
Requirements
Machinery
8) Responsibilities Technical officer and engineering
9) Timing Continuous
10) Reporting/Monitoring Engineer in chief
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References:
Ablis.business.gov.au. (2017). Australian Business Licence and Information Service Home | ABLIS.
[online] Available at: https://ablis.business.gov.au/pages/home.aspx [Accessed 8 Sep. 2017].
Business.gov.au. (2017). Registrations and licences. [online] Available at:
https://www.business.gov.au/info/plan-and-start/start-your-business/business-and-company-
registration/registration-and-licences [Accessed 8 Sep. 2017].
Fmgl.com.au. (2017). Home | Fortescue Metals Group Ltd. [online] Available at:
http://www.fmgl.com.au/ [Accessed 8 Sep. 2017].
Garcia, L.C., Ribeiro, D.B., Oliveira Roque, F., Ochoa‐Quintero, J.M. and Laurance, W.F., 2017.
Brazil's worst mining disaster: corporations must be compelled to pay the actual environmental
costs. Ecological applications, 27(1), pp.5-9.
Li, Z., Ma, Z., van der Kuijp, T.J., Yuan, Z. and Huang, L., 2014. A review of soil heavy metal pollution
from mines in China: pollution and health risk assessment. Science of the Total Environment, 468,
pp.843-853.
Pandey, B., Agrawal, M. and Singh, S., 2016. Ecological risk assessment of soil contamination by
trace elements around coal mining area. Journal of soils and sediments, 16(1), pp.159-168.
Verdejo, J., Ginocchio, R., Sauvé, S., Mondaca, P. and Neaman, A., 2016. Thresholds of copper
toxicity to lettuce in field-collected agricultural soils exposed to copper mining activities in
Chile. Journal of soil science and plant nutrition, 16(1), pp.154-158.
Zhang, P., Peterson, S., Neilans, D., Wade, S., McGrady, R. and Pugh, J., 2016. Geotechnical risk
management to prevent coal outburst in room-and-pillar mining. International journal of mining
science and technology, 26(1), pp.9-18.
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