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WORLD BANK TECHNICAL PAPER NO. 398

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WORLD BANK TECHNICAL PAPER NO. 398

Pollution Management Series

Setting Prioritiesfor EnvironmentalManagementAn Application to the Mining Sector in Bolivia

Wendy S. AyresKathleen AndersonDavid Hanrahan

The World BankWashington, D.C.

Copyright X 1998The International Bank for Reconstructionand Development/THE WORLD BANK1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

All rights reservedManufactured in the United States of AmericaFirst printing March 1998

Technical Papers are published to communicate the results of the Bank's work to the development community withthe least possible delay. The typescript of this paper therefore has not been prepared in accordance with the proce-dures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources citedin this paper may be informal documents that are not readily available.

The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) andshould not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board ofExecutive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data in-cluded in this publication and accepts no responsibility for any consequence of their use. The boundaries, colors, de-nominations, and other information shown on any map in this volume do not imply on the part of the World BankGroup any judgment on the legal status of any territory or the endorsement or acceptance of such boundaries.

The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sentto the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissem-ination of its work and will normally give permission promptly and, when the reproduction is for noncommercialpurposes, without asking a fee. Permission to copy portions for classroom use is granted through the CopyrightClearance Center, Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U.S.A.

Cover photo: "Miners in Bolivia," by Wendy S. Ayres.

ISSN: 0253-7494

Wendy S. Ayres is an economist in the World Bank's Rural Development Department. Kathleen Anderson is a se-nior fellow at York University's Centre for Applied Sustainability and director of the Mining and Environment Insti-tute. David Hanrahan is an environmental specialist in the World Bank's Environment Department.

Library of Congress Cataloging-in-Publication Data

Ayres, Wendy S.Setting priorities for environmental management: an application

to the mining sector in Bolivia / Wendy S. Ayres, Kathleen Anderson,David Hanrahan.

p. cm. - (World Bank Technical papers; no. 398)Includes bibliographical references and index.ISBN 0-8213-4166-91. Abandoned mined lands reclamation-Bolivia. 2. Mineral

industries-Capital investments-Bolivia-Cost effectiveness.3. Company towns-Bolivia. 4. Corporaci6n Minera de Bolivia.5. International Development Association. I. Anderson, KathleenA., 1955- . II. Hanrahan, David, 1950- . III. Title.IV. Series.TD195.M5A98 1997333.8'153'0984-dc2l 9746571

Contents

Page No.

FOREWORD .................. vii

ABSTRACT .................. viii

ACKNOWLEDGMENTS .................. ix

EXECUTIVE SUMMARY .................... 1

1 MINING AND ENVIRONMENT IN BOLIVIA .4Bolivia and Mining .4COMIBOL Mining Communities in Western Bolivia .5Environmental Problems Due to Mining .7

2 SELECTING SITES FOR REMEDIATION .9Risk-Based Approach .9Methodology .0

3 IDENTIFYING PRIORITY ACTIVITIES AND INVESTMENTS FORENVIRONMENTAL MANAGEMENT .17

Framework .17Environmental Conditions in Mining Communities in Western Bolivia .22Choosing Priority Investments and Activities .26Site-Specific Proposals .27Caveats .34

ANNEXES

1 Hazard Ranking System with Example .372 Rapid Site Assessment .453 Chief Pathways and Critical and Background Levels of Key Contaminants .544 Calculating a Marginal Cost Curve: Example .565 Inventory of Mines and Smelters in Bolivia, Relative Ranking of Mines by Hazard .

Potential, and Individual Mine Hazard Scores .606 Site Specific Recommendations for Further Investigation for Environental .

Improvement ............. 69

BIBLIOGRAPHY ............. 73

iii

iv

WORKBOOK ..................................................... 75

TEXT TABLES

1 Summary of pollutants critical to human health .192 Drinking water quality in selected mining communities compared with Pan

American Health Organization and United States standards .233 Heavy metals in soils in Tierra and Luna compared with critical and background levels... 244 Heavy metals in crops in Luna compared with critical and background levels .25

TEXT FIGURE

1 Methodology for estimating health benefits from reducing pollution .................................. 20

ANNEX TABLES

Al A.1 Mine hazard scoring worksheet .39A1 B.1 Type of commodity produced .40A1B.2 Current status .40AIB.3 Number of years operating .40A1B.4 Size of production .40A1B.5 Mill type .40A1C.1 Exposed population .41A1C.2 Exposed buildings and materials ............................. 41AIC.3 Sensitivity of exposed ecosystems .41AID.1 Mine hazard scoring worksheet: Example .44

A2.1 Rapid site assessment form .48

A3.1 Chief pathways of exposure to environmental contaminants .54A3.2 Critical and background levels of selected metals and chemicals .55

A4.1 Costs and quantities of cadmium reduction: Example .59

A5.1 Inventory of mines and smelters in Bolivia ............................. 61A5.2 Relative ranking of mines by their hazard potential .62A5.3 Mine hazard scoring spreadsheet: Luna ............................ 63A5.4 Mine hazard scoring worksheet: Javiar .64A5.5 Mine hazard scoring worksheet: Estrella .65A5.6 Mine hazard scoring worksheet: Jupiter .66A5.7 Mine hazard scoring worksheet: Venus .67A5.8 Mine hazard scoring worksheet: Marte smelter .68

v

A6. 1 Recommendations for further investigation: Sol ................ ......................... 69A6.2 Recommendations for further investigation: Luna ......................................... 70A6.3 Recommendations for further investigation: Tierra ......................................... 71

ANNEX FIGURE

A4.1 Cost per kilogram of cadmium removed .......................................... 59

MAP

Major COMIBOL mining centers in Western Bolivia

Foreword

Mining and industrial activities, if poorly managed, can damage the environment and leavebehind contaminated materials which release pollutants for many years after the mines orenterprises have shut down. Cleaning up old mine and industrial sites is often extremely costly.Furthermore, cleaning up the sites may not result in appreciable improvements in human healthor the environment. Given resource constraints, what decision rules should guide activities forremediation? Which sites should be addressed first? Which specific actions and investments arelikely to provide the greatest benefits for the resources spent?

These questions have arisen in the context of preparing the International DevelopmentAssociation-assisted Bolivia: Environment, Industry, and Mining Project, undertaken to addressenvironmental problems in communities with mines owned and operated by Bolivia's statemining corporation, COMIBOL. The project was in support of the government's efforts torevitalize the mining sector by attracting private sector investment and by transferring operatingresponsibility from COMIBOL to the private sector. Methodologies were developed forselecting priority sites for remediating environmental problems due to mining and then forchoosing specific high priority investments which would provide the greatest benefits for theavailable resources. This paper describes these methodologies. The methodologies have broadapplication and can be used to identify priority remediation investments in other sectors or inother countries where there are environmental problems arising from activities of the past.

Robert Watson Maritta Koch- WeserDirector Director

Environment Department Environmentally and Socially

Environmentally and Socially Sustainable DevelopmentSustainable Development Latin America and the

Caribbean Region

vii

Abstract

Mining and industrial activities, if poorly managed, can damage the environment and leavebehind contaminated materials which release pollutants for many years after the mines orenterprises have shut down. Cleaning up old mine and industrial sites is often extremely costly.Furthermore, cleaning up the sites may not result in appreciable improvements in human healthor the environment. Given resource constraints, what decision rules should guide activities forremediation? Which sites should be addressed first? Which specific actions and investments arelikely to provide the greatest benefits for the resources spent?

This paper addresses the question of how to set priorities for environmental remediation. Itoffers a practical approach for selecting priority sites. And it provides a framework for choosingpriority investments and activities for environmental management more broadly, if resources arenot earmarked for remediation. A workbook illustrates with examples how to calculate thebenefits of potential investments and activities, and weigh these benefits against costs.

The paper arose from work the authors conducted while preparing an environment and miningproject for Bolivia, financed by the International Development Association of the World BankGroup. While the paper focuses on Bolivian mining communities, its approach is applicable to awide-range of problems and communities.

viii

Acknowledgments

The authors wish to thank Christopher Barham and Krishna Challa of the World Bank whosupported this work from its inception. The authors also wish to thank Norman Hicks, LuisHidalgo, David Hughart, Dianne Hughes, Gordon Hughes, Andres Liebenthal, Alberto Nogales,Dan Morrow, Felix Remy, Jennifer Sara and Gotthard Walser of the World Bank, MarcoGiussani of COMIBOL, Fernando Loayza and Antonio Bojanic of the Bolivia Secretariat ofMines, Robert Toth of R. B. Toth Associates, and many others many others for invaluable adviceand guidance. The views presented here are the authors' alone and should not be attributed to theWorld Bank or its member governments.

ix

Executive Summary

MINING AND ENVIRONMENT IN BOLIVIA

Past mining activities in Bolivia have caused considerable environmental damage which may beposing a risk to human health, ecosystems and economic infrastructure. Due to a change ineconomic policy, coupled with a collapse in tin and other metals prices in the mid-1980s,Bolivia's state-owned mining sector is undergoing a major restructuring. The state miningcorporation, Corporaci6n Minera de Bolivia (COMIBOL), has closed a number of mines andintroduced major changes in the operations of others. It has also reduced its labor forcesignificantly. COMIBOL mines with the potential of being profitable are being offered forprivate participation, a process called capitalization. As part of this process, COMIBOL plans toaddress environmental damage resulting from its past mining activities. The InternationalDevelopment Association (IDA) of the World Bank Group is supporting this effort through theEnvironment, Industry and Mining Project, which started in 1996. However, the cost of cleaningup past contamination at all COMIBOL's sites would be enormous - clearly much more thanthe country could afford to pay, given its many other pressing needs. Furthermore, based onexperiences in the United States and elsewhere, it is by no means certain that cleaning up pastcontamination would result in improved health or environmental conditions.

This paper grew out of work done to assist COMIBOL in identifying how best to use finitefinancial resources specifically targeted for remediation of environmental contaminationassociated with mining. In the first part of the paper we address the question of how to setpriorities for environmental remediation: given the wide-range of mining-related environmentalproblems in the region, what principles should guide and inform decisions on which sites toclean up first, how much to clean them up, and how to clean them up. In the second part of thepaper we relax the constraint that financial resources must be dedicated to the remediation ofmine waste, and we take on the question of how to set priorities for environmental managementin general. While the paper focuses on Bolivian mining communities, its approach is applicableto a wide-range of problems and communities. A workbook with detailed examples of how tocarry out the calculations appears following the annexes.

RANKING SITES FOR REMEDIATION

Mining sites differ with respect to their potential to damage human health, ecosystems, andeconomic infrastructure - even if the extent and nature of their contamination is similar. The

2 Setting Priorities for Environmental Management. Mining in Bolivia

differences arise mainly from the mine's proximity to population centers and the geological,climatological and hydrological conditions of its setting. Given the differences, it makes sense toremediate the mine sites posing the greatest risks first, leaving remediation of those presentingsmaller risks for later, when additional resources become available.

Chapter 2 of this paper presents a methodology for ranking mine sites with respect to theirpotential to cause harm. The methodology addresses environmental problems arising fromhistoric mining activities. It is assumed that environmental issues associated with active andproposed mines will be addressed under the prevailing regulatory regime and in site specificpermit negotiations.

Risk-based approach

Broadly, the approach presented here involves addressing mine sites according to the risk thatthey pose to people, economic infrastructure and ecosystems. The chain of logic is consistentwith standard risk assessment, involving identifying the main health and environmental impacts,focusing on the sources of the pollutants, and then developing cost-effective methods to reducethe pollution loads and therefore the exposure levels and risks.

The risk-based approach differs from the standards-based approach, which is widely followed inthe United States and Western Europe. With the standards-based approach, all properties mustbe cleaned up to meet a particular environmental standard, regardless of whether thecontamination is threatening human health or causing significant environmental or economicdamage. Thus an isolated desert property is required to be cleaned up to the same standards asone in a densely populated city. Such an approach almost never results in an efficient use ofresources. The risk-based approach, by contrast, specifically targets those investments andactivities likely to provide the greatest benefits for the money spent.

SELECTING PRIORITY INVESTMENTS AND ACTIVITIES FOR ENVIRONMENTALMANAGEMENT

In the mining communities of Western Bolivia, as in every community throughout the world,there are numerous types and sources of environmental contamination which may pose a risk tohuman health, economic infrastructure and ecosystems. Many of these problems will beunrelated to contamination from mining, although they may receive less attention because theyare so common. Which problems and sources should be addressed first? Which activities andinvestments will provide the largest benefits for the resources used? How should investmentchoices be made in cases where there are few or unreliable data? Chapter 3 of the paper providesa framework for setting priorities for environmental management within mining communities-these priorities may or may not involve remediating contamination from past activities.

Executive Summary 3

Calculating benefits

The highest priority activities and investments are those which provide the greatest benefits forthe resources spent. Calculating the benefits involves estimating a relationship between areduction in environmental hazards at a particular site or from a specific source and its likelyeffects on human beings, infrastructure, or ecosystems. The next step is to value this physicaldamage in monetary or economic terms.

In Bolivian mining towns the most serious problems are likely to be microbiologicalcontamination of drinking water, lead in various media, airborne dust, and possibly cadmium andarsenic in the environment. If there are available reasonable-cost investments activities orinvestments which reduce the incidence of water-borne diseases, cases of elevated blood-lead,and morbidity and mortality associated with exposure to airborne dust or heavy metals, these arelikely to provide significant benefits to human health and the economy.

For many Bolivian mining towns, remediating contamination from past mining activities maynot be a cost-effective solution to reducing the most immediate risks to health due toenvironmental pollution. For example, it may be more cost-effective to provide drinking waterfrom deepwater aquifers than to remediate all sources of acid rock drainage that are makingsurface water bodies unfit for drinking water. Furthermore, many rivers in the Altiplano containvery high natural levels of arsenic, lead and copper, so remediating sources of contamination willnot make their water any more usable for drinking. To reduce exposure to airborne dust, it maybe both more effective and lower-cost to seal or pave urban roads than to cover or move tailingspiles. Paving the roads would provide, in addition to health benefits, the benefits of lowertransportation costs, reduced cleaning costs and the amenity values associated with havingcleaner air.

The primary reason to remediate past contamination from mining is often to protect ecosystemsrather than to protect human health. However, restoring aquatic ecosystems is often verydifficult to achieve: it may be necessary to completely (or nearly so) remediate a very largepercentage of all the sources of contamination - including nonmining sources -before thestreams or rivers could support breeding populations of fish. Attaining this goal would requirethe remediation, control and management of all sources of pollution within a watershed (ofcourse measures to protect human health would also contribute to protecting aquatic habitats).While there are many long-term benefits to restoring ecosystems, these benefits may takedecades to realize, and are extremely costly to implement.

Still, remediation activities may be worthwhile in some places. Where acid rock drainage isclearly damaging infrastructure, such as in Sol, there may be low-cost activities which can reducethis damage. Where groundwater or sensitive ecosystems are threatened, it may be worthwhileto try to prevent further damage.

1 Mining and Environment in Bolivia

Past mining activities in Bolivia have caused considerable environmental contamination whichmay be posing a risk to human health, ecosystems and economic infrastructure. Due to a changein economic policy, coupled with a collapse in tin and other metals prices in the mid-1980s,Bolivia's state-owned mining sector is undergoing a major restructuring. The state miningcorporation, COMIBOL, has closed a number of mines and introduced major changes in theoperation of others. It has also reduced its labor force significantly. COMIBOL mines with thepotential of being profitable are being offered for private participation, a process calledcapitalization. As part of this process, COMIBOL, with the assistance of an IDA credit, plans toaddress environmental damage resulting from its past mining activities. The purpose of thispaper is to assist COMIBOL to identify the sites which should be addressed first and theactivities and investments that should be undertaken at these sites. However, the approach in thepaper has broad application and could be used to identify priority remediation investments inother sectors or in other countries where there are environmental problems arising from pastmining or similar activities.

BOLIVIA AND MINING

Bolivia is one of the poorest countries in South America, with a per capita annual income of lessthan US$800. It has a population of about 7.1 million people, 60 percent of Indian descent.Bolivia is a country of great physical and climatological contrasts. The capital, La Paz, is at analtitude of nearly 4,000 meters and is flanked by snow-capped mountains. The second largestand the fastest growing city, Santa Cruz, is situated only 300 meters above sea level at theheadwaters of the Amazon.

The history of Bolivia is closely tied to mining. The local people mined silver and gold in theAltiplano before the arrival of the Spanish. In 1545 the Spanish discovered the Inca mines ofCerro Rico (Rich Hill) in Potosi, and began to extract huge quantities of silver. In theseventeenth century Potosi was one of the three largest and most prosperous cities in the world;its silver contributed greatly to the development of Europe. In the centuries that followed anumber of other major mines were developed, initially to extract silver, and more recently toexploit lead, zinc, tin, and gold.

4

Mining and Environment in Bolivia 5

Nationalization of mines

By the middle of the twentieth century, three barons controlled the major mining areas, one ofwhom was reputed to be the richest man in the world at the time. However in 1952 a popularrevolution overthrew the government, nationalized the tin mines, carried out agrarian reform andproclaimed universal suffrage. Mining provided a significant part of Bolivia's export earningsover the next three decades, but in the mid- I 980s the tin cartel collapsed and with it the price oftin.

Shortly thereafter, the government began to restructure COMIBOL, the state mining corporation.COMIBOL closed most of its uneconomic mines and greatly reduced the workforce at others.Many of the miners who lost their employment with COMIBOL became independent contractorsaffiliated with state sanctioned cooperatives (cooperativas). These workers (calledcooperativistas) mine some of the lower grade deposits adjoining the mines or within abandonedmines, and rework some of the tailings heaps using their own materials and tools.

Capitalization program

The government is now embarking on a program to attract new private investment to thoseCOMIBOL mines which have sufficient reserves to be operated profitably. COMIBOL will nolonger operate the mines, but will serve as an administrative body. The InternationalDevelopment Association (IDA) of the World Bank is assisting COMIBOL and the Secretariat ofMines in the capitalization process through the Mining Sector Rehabilitation Project. In asupplemental activity intended to support the capitalization program, IDA is providing assistancethrough the Environment, Industry, and Mining Project, which will address environmentaldamage arising from historic mining activities.

COMIBOL MINING COMMUNITIES IN WESTERN BOLIVIA

The COMIBOL mining centers that are covered by the Environment, Industry, and MiningProject include Oruro (San Jose mine), Potosi (Unificada mine), Llallagua (Siglo XX mine andCatavi smelter), Santa Fe, Huanuni, Colquiri and Caracoles (see map). Since much of theenvironmental data in this paper are not public information, the mining centers will hereafter bereferred to by pseudonyms to protect their identity.

The mining communities vary considerably in their size, environmental conditions, proximity tomarkets, and potential to develop alternative industries and sources of employment. SomeCOMIBOL mining communities, such as Sol, are relatively large urban centers, with diversesources of employment and good transportation links. Others, such as Nube and nearbysettlements, are small, relatively isolated communities with few sources of alternativeemployment. Some of the mines will be attractive to new investors: Luna and Tierra appear tocontain rich reserves of tin and tin/zinc which may potentially be exploited profitably. Others

6 Setting Priorities for Environmental Management: Mining in Bolivia

will not attract new capital but will be worked by small-scale miners using primitivetechnologies and earning very small incomes. Because the communities vary so extensively intheir environmental and socioeconomic conditions, it will not be possible to suggest generalremediation investments that will make sense for all. Instead, investment programs must reflectthe unique conditions prevailing in each of these communities.

Characteristics of hard rock mines

The typical large mine in the Altiplano covers an area of several square kilometers, and has anumber of passages (tunnels or adits) into the ore body, a haulage system (rails or road), usuallyone or more concentrator plants, a number of heaps of mine or concentrator wastes, and perhapsa tailings dam. The mine operations also normally include offices and workshops. The miningarea generally includes settlements with housing for workers and their families, shops, healthfacilities, schools and other urban amenities. These settlements may or may not be owned by themine. In some cases where mines have been closed or their workforce reduced, the number ofcooperative workers or informal miners living in a community can be ten or twenty times the sizeof number of persons employed by COMIBOL.

Hard rock mining in the Altiplano has traditionally been underground mining with low levels ofmechanization. The major economic ore bodies are made up of complex non-ferrous metals,usually with a sulfide matrix. Extracted ores usually undergo some level of processing orconcentrating near the mine. Processing facilities range from very small artisanal operationsrelying on primitive techniques, to large relatively modern smelters.

In addition to hard rock mining, Bolivia has a growing informal gold-mining sector, whichoperates primarily, but not exclusively, in the Amazon basin. The Environment, Industry andMining project is not dealing with the informal gold mining sector.

Natural environment of the Altiplano

Bolivia's environment can be categorized into three major ecological zones: the Altiplano, theAmazon basin, and the fertile slopes of the Cordillera in between. Since most hard rock miningtakes place in the Altiplano, this is the area that is the focus of the Environment, Mining andEnvironment Project.

The Altiplano is a cold, arid highland plateau with an average altitude of 4,000 meters. About 70percent of Bolivia's citizens live here, surviving on subsistence agriculture, llama and sheepherding, and whatever other sources of income that they can find. Mining has traditionally beenan important source of income for the region's inhabitants, and despite the rigors and uncertaintyof mining work, it is still an important part of life. There are a number of small towns andvillages throughout the Altiplano. The main mining centers are Potosi and Sol, both of which arecapitals of departments of the same name.

Mining and Environment in Bolivia 7

In hydrologic terms, the Altiplano is an enclosed basin, which receives outflows from LakeTiticaca and seasonal flows from mountain rivers. The flows end in the Lake Poop6 system or inthe salt flats (salars). The quantity of water in the system can vary greatly, both seasonally andover longer cycles of years or decades. Some of the mines on the edges of the Altiplano are nearthe continental divide. There are major mines near the headwaters of the Amazon and the Paranaand Paraguay River systems.

ENVIRONMENTAL PROBLEMS DUE TO MINING

Historically, mining activities have created numerous sources of contamination which affectsurface water (and in some cases, groundwater), air and soil. Tailings from the mills, waste rock,underground and open pit mine workings, roads, wastewater ponds, landfills, and smelters areamong the sources which have the potential to discharge mining-related pollution into theenvironment. Of particular concern in Western Bolivia are those sources which generate verylow-pH water (acid rock drainage or ARD). Acid rock drainage is a naturally occurring processwhich can be greatly exacerbated by mining due to the increased exposure of rock to air andwater. It may discharge from tunnels and mine entryways (adits), seep from the toe of tailingsand waste rock piles, or run off from roads and dams which have been constructed with wastematerials. Acid rock drainage is a concern because it dissolves and transports metals, such aslead, arsenic, cadmium, and zinc, which may pose a threat to human health and the environment.Furthermore, very low-pH water is lethal to most aquatic organisms. In Bolivia, it is quitecommon for the drainage from the mine or the dumps to have a pH of 3 or less and to containhigh concentrations of metals and metalloids such as lead, silver, cadmium, and arsenic. Atsome mining centers in Bolivia, acid rock drainage has destroyed aquatic ecosystems for up totwenty kilometers downstream from the sources of discharge. The nature, extent, and impact ofacid rock drainage varies greatly, however. The environmental degradation associated with acidrock drainage is determined by many factors, including water chemistry in receiving streams andrivers, dilution and temperature.

Ore processing or concentration activities can also generate pollution. Mineral processing useschemicals (reagents), such as cyanide and mercury, which may be hazardous to human healthand the environment. Concentrating or processing the ores typically involves wet processes suchas flotation or leaching which may also utilize cyanide or mercury, among other chemicals. Ifwastewater from these processes is not properly managed, it can contaminate the environment,threatening human health, and animal and aquatic life.

Communities have used mine waste material extensively to build impoundments, roads, andcommon areas such as playgrounds and sports fields. Many of these structures continue torelease metals through the acid-generating process. Inhabitants frequently come into directcontact with the mine waste; children play on or adjacent to tailings and waste rock piles, andresidents build houses directly on old tailings. However, it is important to note that contact -


even direct contact - does not presuppose risk. Mine waste is highly variable, both in toxicityand in bioavailability. For example, some forms of arsenic or of lead are not readily absorbedinto the human body, and therefore do not pose a significant risk to human health. In addition,some heavy metals or metalloids may not harm human health until persons have been exposed toa threshold level. Exposure to the element at quantities below the threshold causes no damage atall. Recent evidence suggests this is the case with arsenic (Wildavsky, 1995).

Air pollution due to mining generally arises through the release of dust from the transport,handling and processing of ore, and from dust blown from the heaps of fine tailings. Smeltersmay also contribute significantly to air pollution. Poorly managed smelters may emit high levelsof metal-bearing dust and gases containing high levels of volatilized metals (such as arsenic)which later condense into fine particulates (of serious concern from a health point of view). Inaddition, poor dust control within the plant can allow fugitive dust to escape into the atmospherein quantities equal to or greater than the levels emitted from the stacks.

Finally, mining can leave behind many physical hazards. Tunneling disturbs the landscape andcan result in erosion, landslides, land subsidence and unstable ground. Uncontrolled mineopenings can be dangerous to humans or animals. Mining uses explosives, chemicals andmachinery, which if improperly disposed of can endanger persons or livestock with access to thesite.

2 Selecting Sites for Remediation

Mining sites differ with respect to their potential to damage human health, ecosystems, andeconomic infrastructure - even if the extent and nature of their contamination is similar. Thedifferences arise mainly from the mine's proximity to population centers and the geological,climatological and hydrological conditions of its setting. Given the differences, it makes sense toremediate the mine sites posing the greatest risks first, leaving remediation of those presentingsmaller risks for later, when additional resources become available.

The methodology for selecting priority mine sites presented here has been developed to provide areasonably rigorous and systematic way to identify the sites where environmental damage frompast mining activities may be imposing significant human and economic costs. The approach isintended to improve the chances that scarce resources are used in the best possible way.

The methodology addresses environmental problems arising from historic mining activities. It isassumed that environmental issues associated with active and proposed mines will be addressedunder the prevailing regulatory regime and in site specific permit negotiations.

RISK-BASED APPROACH

The approach presented here is consistent with standard risk assessment, involving identifyingthe main health and environmental impacts, focusing on the sources of the pollutants, and thendeveloping cost-effective methods to reduce the pollution loads and therefore the exposure levelsand risks. The risk-based approach differs from the standards-based approach, which is widelyfollowed in the United States and Western Europe. With the standards-based approach, allproperties must be cleaned up to meet a particular environmental standard, regardless of whetherthe contamination is threatening human health or causing significant environmental or economicdamage.

Thus an isolated desert property is required to be cleaned up to the same standards as one in adensely populated city. Such an approach almost never results in an efficient use of resources.The risk-based approach, by contrast, specifically targets those investments and activities likelyto provide the greatest benefits for the money spent.

9


METHODOLOGY

The methodology comprises four principal stages:

1. Screen all sites and produce an initial ranking of their hazard potential, based on minimaldata.

2. Identify priority sites for remedial action based on data obtained in short visits to the sites(and their surroundings) identified in Stage I as most likely to be hazardous. Define dataneeds for more complete assessments of the impacts of the hazards and sources ofdamage.

3. Carry out audits on high priority properties (where these are not being done byCOMIBOL as part of the capitalization program) to ascertain the nature and extent of thehazards.

4. Determine appropriate actions at each of the priority sites, based on estimates of thebenefits of reducing environmental contamination and on the costs of alternative actionsfor reducing contamination. The environmental audits being carried out by COMIBOLon its productive mines will provide information useful in identifying the priorityinvestments and activities. Details of how to set priorities at individual sites is presentedin chapter 3.

The outcome is a list of possible remediation actions, ranked (or grouped) by their likelihood toprovide significant benefits for the resources spent. This list can then be used as part of a broaderdecision making process to allocate available funds.

Stage 1 Initial screening and ranking

la Preparing an inventory of sites

The first step in selecting priority sites for remediation is to compile an inventory of all sitesunder consideration, which in this case are those where COMIBOL has been active in mining,including sites that are abandoned or contain abandoned portions, as well as mines that arecurrently operating. This inventory should be as detailed as possible using readily availableinformation from published sources or databases. The inventory should include as muchinformation as possible on the following characteristics:

* Exact location* Type of operation (underground, open pit)* Current status (operating, abandoned)* Type of commodity produced

Selecting Sites 11

* Minerals present on-site (including minerals surrounding the ore body and in waste rock)* Types of minerals or chemicals likely to be present in the ambient air or water* Dates of discovery, production, closure* Years of operation* Mine size (surface area, volume of ore production)* Existence of processing facilities on or near the site* Predominant methods for mining, milling, and mill processing (mill type)* Human settlements near the site: population, economic activities* Water resources on or near the site* Ownership structure, including description of cooperative activity.

lb Ranking sites by their hazard potential

The next step is to rank the sites according to their potential to damage human health andeconomic infrastructure and ecosystems. A scoring system has been developed to allowconsistent comparisons to be carried out. Each site identified in the inventory is assigned anumeric hazard value. These numbers are derived from values based on particular sitecharacteristics, for example:

* Number of people living in proximity to the mine (number of people potentially exposed tohazardous levels of heavy metals or chemicals)

* Likelihood that metals and chemicals present at the site could damage human health* Likelihood that metals and chemicals present could harm ecosystems or economic

infrastructure* Existence of physical hazards (dangerous mine openings, unstable ground, unstable waste

rock piles or tailings dams, and the like).

The sites ranking the highest after this initial screening are the priority sites for furtherinvestigation.

Annex 1 provides a detailed presentation of the method for assigning hazard scores to individualmines and a simple spreadsheet for calculating the total hazard value. Annex 1 also contains anexample of a completed spreadsheet for Tierra mine based on data in the Tierra environmentalaudit.

This ranking system provides a method for comparing sites with respect to their potential to becausing human health and environmental damage. The values produced are not absolute but doprovide a robust and consistent estimate of relative hazard potential. The numerics also providea rough ranking of the individual hazards at a specific site. Annex 5 contains an inventory of thekey mines in Bolivia, a table with the relative ranking of the mines by their hazard potential, andhazard scoring spreadsheets for individual mines.


Stage 2 Investigating priority sites

Stage 2 involves visiting the sites that have been identified in Stage 1 as "priority sites" in orderto confirm the initial assessment and to assess the nature and extent of hazards present that maywarrant remediation. Sites judged to pose serious dangers are targeted for more completeenvironmental audits.

2a Rapid environmental assessment

The initial visits provide quick overviews or "rapid environmental assessments" of siteconditions, based on visual inspection and collection of immediately available information. It isintended that the assessments should last no longer than a day or two. The field workers shouldrecord the physical conditions at the site, note any evidence of chemical contamination andshould provide a first estimate of the severity of the danger to human inhabitants or to theenvironment. It is essential that the assessment cover not only the site itself but also the areassurrounding the site which may have been affected by contamination from the mine.

A first step in the site visit is to prepare a map showing the boundaries of the mine property (ifpossible) as well as important features that exist inside and outside the boundaries of the mineproperty and which may be affected by contamination generated by current or past miningactivities.

Annex 2 contains a worksheet with the features and conditions to note during the site visit.Using this worksheet for guidance, the assessors should collect as much data as possible on thenature of the hazards, sources of contamination, and receptors of pollution.

2b Identifying pathways of exposure and areas of impact

A critical task for the assessment is to estimate the potential pathways of exposure and thenumber of people likely to be exposed to contaminants. These data will help in estimating thepotential benefits of reducing pollution flows or cleaning up contamination from past miningactivities.

For example, the field workers should note whether people are growing crops near smelters, areirrigating land with water that drains from the mine, or eating fish from water bodies affected bymine drainage or the runoff from ore processing. In each case, a best estimate should be made ofthe relevant numbers: hectares of crop land, quantities of fish caught, and numbers of personseating the fish. Annex 3 Table A3. 1 summarizes the chief pathways through which persons areexposed to hazardous minerals and chemicals.

Selecting Sites 13

Stage 3 Ascertaining the nature and extent of the environmental damage at a site:Detailed site assessments or audits

Sites judged to be a source of serious damage are targeted for a more complete assessment ofenvironmental conditions (usually called an "audit"). In addition to providing information on thesources of pollution and possible remediation options, these audits should provide as much detailas possible on the human and economic impacts of the contamination. The audits must includeimpacts occurring outside the mining property (off-site effects). The main economic impacts toconsider are damage to human health, materials damage, and ecosystem damage.

3a Collecting data on impacts of past mining operations

Human health

Physical hazards. Accidents are the major cause of injury or death on mine sites. Especially atold sites, there are numerous physical hazards which threaten the health and safety of people. Itis often difficult, if not impossible, to prevent access to sites by children, vandals and others whoare either unaware of the hazards or lack the training needed to deal with them appropriately.Hazards at mine sites are relatively simple to identify. The auditors should make note of as manyof the site's physical hazards as possible.

Pollution. By far the best way of ascertaining whether environmental pollutants are actuallydamaging human health is to collect clinical health data. The existence of metals in theenvironment does not necessarily mean that these are causing illness or death. Not all species ofmetals are equally bioavailable, and exposure to those that are not will not generally damagehealth.' Furthermore, people's exposure to pollutants can vary greatly depending on theirlifestyle. Having clinical data on body burdens of metals can allow decisionmakers to targetparticular populations for protection and sources of pollution for remediation, thereby potentiallysaving enormous resources. Simple and inexpensive techniques exist which allow clinicians tocollect information on lead in blood, arsenic in urine or hair, cadmium in urine, and mercury inhair or blood. Therefore, if at all possible, auditors should collect clinical health data. Thesedata also provide baselines which can be used to monitor the effectiveness of future remediationprograms. Information on sicknesses or deaths resulting from exposure to pollutants would alsobe valuable.

It is also important to obtain information on levels of a contaminant in the air, water, food or soil,where these are important sources of human exposure. In the case of lead, the chief routes ofexposure are inhalation or ingestion. Most persons receive their largest daily intakes throughfood. However, for persons living near busy roads or near point sources such as smelters,

I Species refers to the variety of physico-chemical forms which metals may take, affecting their mobility andsolubility. Bioavailability refers to the ability of a biological organism to take up the metal.


inhalation may be the key source of exposure. Children may receive large doses of lead byingesting contaminated soil or dust. Exposure to cadmium comes mainly through ingesting foodor drinking water containing cadmium. Food crops grown on contaminated soils may containhigh levels of cadmium. Cadmium may also be present in the air, especially near zinc or leadproduction plants. For arsenic, the major routes of exposure are inhalation or ingestion. In minedrainage areas, a major route of exposure may be drinking water. Near smelters or mines, airmay contain high concentrations of arsenic. Fish, especially bottom-feeders, may be animportant route of exposure in some areas. The primary source of mercury exposure for humansis by consuming fish. Persons may also be exposed to mercury vapor in the air near smelters.Exposure to high levels of zinc, silver, or other heavy metals, comes mainly through ingestionof food or drinking water. Finally, exposure to cyanide occurs mainly by direct handling of thesolution. Information on contamination of particular environmental media is essential fordesigning sensible remediation programs. Table I presents a summary of the pollutants criticalto human health, table A3.1 shows their chief pathways of exposure, and table A3.2 containsinformation on background and critical levels of the key pollutants.

Economic infrastructure and agriculture

Field workers should note any evidence of damage to economic infrastructure being caused byexposure to mine-related pollution. They should record evidence of agricultural activity withinor near the mining property. Where there is farming, analysts should collect data on averageyields. Finally, analysts should test crops for the presence of heavy metals.

Ecosystems

Mine-related pollution can affect ecosystems in numerous ways. Analysts should test streamsand waterways for both physical and chemical changes which can diminish the viability of theaquatic ecosystem, and indicate the length of river affected. Because impacts may varysubstantially with dilution, temperature, flow rate and other factors, they should test streams atboth high and low flow. They should test fish and plant life for heavy metal contamination, andsample soils in stream and river beds for the presence of heavy metals. Observers should alsonote whether runoff from roads or periodic releases from dams is increasing turbidity inwaterways, which can affect aquatic habitats and breeding grounds. Analysts should be sure tonote the many climatic, topographic and other natural factors which may influence ecosystemhealth, unrelated to peoples' activities. They should also note historic uses of lands abutting thestreams and waterways.

3b Estimating the marginal costs of remediation at a mine

The audits should include information on the costs of alternative remediation measures alongwith the likely impacts of the proposed measures. For example, containment may be a relativelylow-cost action for reducing leaching of metals from old tailings dams. Thus the audit should

Selecting Sites 15

provide an estimate of the costs of containment, the impact this will have on metals leachingfrom the dam, and finally the impact this will have on ambient water quality and on aquatic lifein the affected river. As another example, diversion of acid mine drainage through cementchannels may redirect low pH water away from sensitive areas. The audit should then includeestimates of the way this action will reduce the impacts (for example, pipe corrosion) associatedwith exposure to acid mine drainage. The purpose of the exercise is to identify a range ofoptions of different costs which have varying impacts on human health and the environment.

Example. The marginal costs of reducing discharges to the environment

In Bolivia, discharges from mining activities may be contaminating streams, rivers, andunderground aquifers. The pollutants of concern are principally heavy metals and acidity itself,although chemical reagents such as cyanide may be released into the environment. In addition,heavy sediment loads can disturb ecosystems of the receiving water bodies.

The environmental audit of the Tierra mine identifies a number of sources of contaminantsentering water bodies. These are:

D Drainage water from mine dumpsD Drainage water from galleries

X Drainage from the tailings dam.

Flows from these sources contribute to a greater or lesser degree to pollution loads in the riversdraining the mine area and possibly to groundwater pollution. To identify cost-effectivecontainment and remediation activities, the approach is to identify the pollutants which arecausing damage (assumed on present evidence to be principally the heavy metals), estimate theextent of the damage, and rank measures which would reduce pollution flows from these sourcesaccording to their costs per unit of pollution avoided. Annex 4 contains an example of thecalculation of a marginal cost curve.

Stage 4 Choosing remediation measures at priority sites

Selecting remediation actions involves a judgment of both the benefits and costs of remediation.High priority investments and actions are those which provide the greatest benefits for theresources used. Typically there will be a number of relatively low cost actions which have asignificant effect on the release of pollutants and these should be selected as the first actions tobe undertaken. An example might be diverting acid drainage away from sensitive areas. To theextent possible, the analyst should rank all possible actions at a site for which marginal benefits(that is, the additional benefits after all the previous actions have been implemented) exceedmarginal costs. The highest ranking projects are those with the largest net present value. Thislist then represents the eligible actions at the site, but it does not mean that all of these actionswill necessarily be undertaken.


There is a considerable uncertainty about many of the elements of the selection process: thebenefits are difficult to quantify; the pathways of exposure and the effectiveness of actions inreducing the exposure are often uncertain; and the costs of the actions are always subject to anumber of influences. A level of professional judgment will therefore be necessary to identifyeffective remediation actions and assign them priority. Still, it should be possible to roughlyidentify those actions and investments which will provide the greatest environmentalimprovements for the investment required. Details on how to compute benefits of environmentalimprovements are presented in chapter 3.

4a Establishing priorities across sites

Comparing actions across sites is even more difficult than setting priorities within a site. Itrequires a common measure of benefit, which in ideal conditions would be the net present valueof the action. Even where precise net present values cannot be calculated, it will often be clearthat some actions will provide much greater benefits than others. For example, actions whichreduce damage to human health will normally have priority over those which reduce damage toecosystems, especially in poor countries. Actions which reduce health risks to large populationswill usually have higher priority than those which will reduce risks to only a few people.

3 Identifying Priority Activities and Investmentsfor Environmental Management

FRAMEWORK

In any community worldwide, there are numerous types and sources of environmentalcontamination which pose a risk to human health, economic infrastructure, and ecosystems. Iffinite resources can be used for activities and investments which generate the greatest benefitsregardless of the cause of environmental damage, how can priorities be set? Which problemsand sources should be addressed first? Which activities and investments will provide the greatestbenefits for the resources used? How should investment choices be made in cases where thereare few or unreliable data? The purpose of this chapter is to provide an approach to identifyinghigh priority activities and investments for environmental management within communities. Inthe context of the Bolivia Environment, Industry, and Mining Project the question is: whatactivities and investments should be undertaken on the sites identified as priority sites? Thissection proposes an approach which considers both the environmental and economic benefits andcosts associated with controlling exposure to environmental hazards. The workbook at the endof the paper illustrates the approach with analyses of typical problems.

Characterizing environmental conditions

The first step is to characterize environmental conditions in the local area under consideration.What are the major pollutants contaminating the air, water, soil, and food? If there are reliabledata, answering this question is straightforward. However, if there are not, as is often the case,considerable judgment will be required. Still, it is usually possible to make reasonablehypotheses based on information on factors such as major economic activities in the area,enterprises in operation, whether or not leaded gasoline is used, the main source of heating fuel,and the percentage of households with access to clean water near their homes. The second step isto identify the pollutants which are expected to be truly hazardous to human health at levelsfound (or likely to be found) in the local area. Efforts to collect more and better data should befocused on the critical pollutants, to establish whether they are indeed posing a risk to humanhealth.

The next step is to calculate the potential benefits to health, economic infrastructure, andecosystems that would arise from reducing environmental hazards. This involves estimating a

17


relationship between a reduction in environmental hazards at a particular site or from a specificsource and its likely impact on human beings, infrastructure or ecosystems. Analysts might ask,for example, how many fewer cases of illness would occur if sulfur dioxide emissions from apower plant were eliminated. This is known as estimating the damage function. The final step isto value the physical damage in monetary or economic terms.

The general idea is to have some estimate of the benefits if an environmental hazard can bereduced. These can then be compared to the costs of reducing or eliminating the hazard. Thepriority activities or investments are those which produce the greatest benefits for the resourcesused.

Estimating benefits from pollution control

Human health

People in poor communities are often exposed to environmental hazards which make them sickor even shortens their lives. For example, drinking contaminated water is a leading cause ofillness and premature death, especially among children, in many low-income countries. In partsof the world where leaded gasoline is still predominant, children may be exposed to high levelshigh levels of lead. Exposure to lead irreversibly impairs children's intellectual and emotionaldevelopment, and very likely permanently reduces their lifetime earnings capacity. The firstpriority in any program to improve the local environment should be to protect human health.

Critical pollutants. The human health impacts due to exposure to various pollutants range fromminor discomfort to reduced life-expectancy. The pollutants likely to be causing the greatesthealth damage in Bolivian mining communities are microbiological contaminants of drinkingwater, lead in soil, water, air, and food, suspended particulate matter in air, and cadmium,arsenic, and possibly mercury in food, soil, and water. Table 1 summarizes the impacts and chiefexposure routes of the critical pollutants.

Determining the extent and severity of human health impacts due to environmentalcontamination is a difficult and complex task. Ideally, the analyst would have detailed dataregarding ambient concentrations of contaminants for each of the potential exposure pathways,and a dose-response function linking exposure to health impacts. For example, if we know that(1) lead in ambient air averages 3 micrograms per cubic meter; (2) each microgram in aircontributes 3.9 micrograms lead per deciliter of blood; and (3) each microgram of lead perdeciliter of blood results in cognitive damage measured as an IQ loss of .25 points, then we canestimate the health benefits from reducing lead in air. With information regarding the size of theexposed population and the extent of the exposure, we can estimate the total burden of disease inthe population that breathes the air. To estimate the full health impacts from environmentalpollution, we would repeat these steps for all potential contaminants and all potential pathways.The approach is summarized in Figure 1.

Identifying Priority Activities and Investments 19

Table 1 Summary of pollutants critical to human health

Contaminant Population Health impact Chief pathways ofat risk exposure

Lead Children, Subtle brain damage and learning disorders, Soil, air,especially under including lower lQs, impaired attention, drinking water,age 7 speech and language deficits, and behavior food

disorders

Microbiological contamination Entire Diarrheal diseases and enteric fevers, Drinking waterof drinking water population, cholera, hepatitis A

especiallychildren

Particulate matter (particles Entire population Acute and chronic respiratory diseases, Airbelow 10 microns) cancer, early death

Heavy metals and metalloids(other than lead)

Mercury Entire population Poisoning, early death Air, fish

Cadmium Entire population Renal dysfunction Food, drinkingwater, soil, air

Arsenic Entire population Poisoning, skin cancer (which is easily Food, drinkingdetected and often reversible), liver water, soil, airdysfunction, vascular disturbances, lungcancer'

a/ The association between exposure to arsenic and lung cancer is suspected but not certain. In any case,Bolivians have life expectancies of around 60 years, so the chronic, cancer-related diseases associated with exposureto heavy metals and metalloids, which affect primarily older people, may be very difficult to detect.

Source: World Health Organization Regional Office for Europe 1987; Hutchinson and Meema 1987; Viessmanand Hammer 1985.

Valuing health damage. Estimating the value of health damage from exposure to environmentaldegradation generally involves estimating the cost of treating a particular illness, the value oftime lost of either the affected individual or a caretaker, and the reduction in well-beingexperienced by the afflicted individual and his family and friends. Typically, costs wouldinclude the costs of visiting a doctor or nurse, the cost of medications, wages lost due to days offfrom work, and demonstrated willingness to pay to reduce the risk of illness or premature death.If the victims of health problems bear their full costs, rather than the government or insuranceprograms, the benefits of reducing exposure to environmental problems accrues entirely to thehousehold. Therefore willingness to pay is a complete measure of benefits.


Figure 1 Methodology for estimating health benefits from reducing pollution

Ambient | Exposure 1 Dose-response Health impacts (cost of mealt pcaesources of No concentrations assessment modeling (incidence of disease) vl olost oductiiyexposure value of lost productivity)

Source: Authors' calculations

Unfortunately, we have very few data on either health conditions of the people or environmentalconditions in mining communities of Western Bolivia. Without more data, it will not be possibleto accurately estimate the health impacts due to environmental pollution. However, based on thedata currently available for these communities, and on studies done in mining communities inother countries, we can provide rough indications of the types of problems that are likely to beimportant, and the essential data that would be needed before undertaking an investmentprogram. Many of these data are relatively simple to collect with well-established and low-costtechniques.

Economic infrastructure and agriculture

Environmental pollutants affect materials and buildings primarily through their presence inwater. Highly acidic mine drainage corrodes piping made of iron, steel or zinc. Acidic watersmay also chemically erode building materials such as concrete, limestone, and dolomite. Thedamages are valued as the costs of replacing materials in advance of their expected lifetimes, theadded costs of utilizing acid-resistant materials (such as fiberglass pipes instead of concretepipes), or the costs of measures to mitigate damage (such as painting or sealing building surfacesexposed to acidic waters).

Yields of agricultural crops may be significantly reduced if irrigated with acidic water or withwater containing arsenic. The value of crops containing heavy metals will also be much lowerthan those free of such contamination, and may indeed be worthless. Estimating the benefits ofreducing pollution involves calculating the reductions in both the quantity and market value ofagricultural output due to exposure to pollution.2

Finally, acid waters containing high concentrations of heavy metals may damage undergroundaquifers which supply drinking water. The damages are valued as the costs of developing analternative water supply, of treating water from the aquifer, or of remediating the source ofpollution.

2 For the proportion of the crop consumed locally, the value of health damage due to their consumption willequal the difference in the market value of the crop, as long as there are substitute supplies. One or the othermeasure should be used in the calculation of benefits, not both.


In cases where the details of the damage are vague or the effects are small, it is often possible tocarry out a relatively quick calculation of the potential benefits of the project by estimating thevalue of the site if it were returned to pristine conditions (this would be related to its potentialalternative uses, such as farm-land or as a fishery). This upper bound for the site-value can thenbe compared to possible remediation costs.

Ecosystems

Most ecosystem damage occurs through exposure to highly acidic waters or to watercontaminated with heavy metals. Few fish species or other aquatic life can survive in water witha pH of less than 4.5. (Discharged mine water in Bolivia typically has a pH of 1.2-2.5.) Heavymetals can cause disease or stunt the growth of some fish and plant species. In addition, runofffrom roads or periodic releases from dams may increase turbidity in waterways, which can affectaquatic habitats and breeding grounds. Estimating the benefits of reducing ecosystemcontamination requires data on both the nature and severity of ecosystem impacts and the numberof hectares of land affected or kilometers of river contaminated.

Valuing ecosystem damage. Estimating the value of reducing ecosystem damage is often animprecise task and generally involves measuring society's willingness to pay to prevent orremediate damage through nonmarket valuation techniques such as the contingent valuationmethod or the travel cost method. Persons who use the ecosystem for recreation or to gatherfood may be willing to pay to preserve their opportunity to pursue these activities. Additionally,persons who never use the resource may be willing to pay to protect it (for example, people payconsiderable sums to protect the rain forest of Brazil even though they never intend to visit theregion). However, studies carried out in other developing countries have shown that residentsare willing to pay very little for ecosystem protection, even those they use for fishing orrecreation (see Choe, Whittington, and Lauria, 1995). In Bolivia, where people have relativelyfew resources to meet many pressing needs, it is not likely that persons would be willing to paymuch to protect ecosystems. Nor have the ecosystems of the Altiplano so far attracted theinterest of donors overseas. The priority, for the time being, would therefore be to prevent theextension of ecosystem damage, with remediation limited to specific areas of particularly highsensitivity.

Attracting private investment

In addition to protecting human health, infrastructure and the environment, an important benefitto Bolivia from remediation activities on COMIBOL mining sites would be to removeimpediments to private investment in COMIBOL mines, including through the CapitalizationProgram. For example, there could be some cases where private investors require COMIBOL toremediate contamination from past mining activities to protect themselves from exposure to risksof liability in the future. These activities may be priority activities, even if they do not providesignificant direct benefits to human health, infrastructure and the environment. This is because


investment would raise incomes, providing resources to improve health and environmentalconditions. Specific guidelines for remediating mine sites to attract private investment areprovided in the workbook.

ENVIRONMENTAL CONDITIONS IN MINING COMMUNITIES IN WESTERNBOLIVIA

There are few data available on ambient concentrations of contaminants in drinking water,surface water or air in the mining communities of Western Bolivia. This lack of information isbeing addressed through monitoring activities conducted as part of the environmental audits nowbeing carried out under the on-going IDA-supported Mining Sector Rehabilitation Project. Whatfollows is a summary of the key findings from the environmental audits currently available forTierra, Luna, and the Javiar mine in Sol.

Drinking water contamination

Drinking water in all three mining communities for which we have data is remarkably free ofcontamination from heavy metals or metalloids (see Table 2). The drinking water meets NorthAmerican and Pan American Health Organization (PAHO) standards for concentrations of heavymetals such as lead and cadmium-by a wide margin for most parameters. For example, in allthree communities for which we have data, the concentrations of both lead and cadmium averageless than 2 micrograms per liter, compared with PAHO drinking water standards of 10micrograms per liter for each substance. However, the drinking water does contain highconcentrations of fecal coliform, bacteria, and salmonella, posing a risk of infection and diarrhealdiseases, particularly for children. The leading cause of sickness and death among childrenbelow the age of five in Bolivian mining communities are diarrheal diseases caused by drinkingwater contaminated with bacteria, fecal coliforms, and viruses. In all three communities, itappears that pipes carrying drinking water have become corroded due to exposure to acid rockdrainage, allowing sewage to contaminate drinking water supplies.

Surface water contamination

In contrast to drinking water, water in streams ancl rivers downstream of mines is oftencontaminated due to mining activities. Some of these streams and rivers have low pH values,contain high concentrations of heavy metals (especially zinc, cadmium, and copper), and carryheavy sediment loads. Surface water bodies may be contaminated for a distance of 3-20kilometers downstream from the sources. In Tierra, Luna, and Sol, the sources of acid rockdrainage are very numerous, discharging from mine adits constructed over the long histories ofthe mines (ranging from 400 years for Javiar in Sol to 150 years for Tierra), old waste rock piles,new waste from cooperative mining activities, and coarse and fine tailings from old and newmilling operations. Many rivers also contain naturally high levels of arsenic, copper, and leaddue to the geochemistry of the underlying bedrock. In some cases, these high background


concentrations exceed intemational standards for human consumption and irrigation. Threerivers with high background metal concentrations are the Desaguadero, Sevaruyo, and Marques.In addition, surface water bodies in mining towns are typically heavily contaminated withsewage. In the mining towns of Tierra, Luna, Nube, and parts of Sol for example, sewage waterflows in open channels through the center of town to the downstream area of cooperative mining.In some of these towns, the informal miners use this contaminated water to treat the ore: that is,men, women, and children work directly in sewage water. Although the presence of acidic waterwith the sewage water to some extent controls the spread of diseases, direct exposure to sewagewater is certainly a major health risk for the workers.

Table 2 Drinking water quality in selected mining communities compared with PanAmerican Health Organization and United States standards

Standards

Tierra Luna Sol PAHOa United Statesb

(micrograms per cubic meter)

Lead .05-2.1 .14-.9 .5-2 10 I5c

Cadmium .01-1.4 .01-.09 .04-.07 10 5

Arsenic .73-6.7 .5-19 13-48 50 50

Zinc .2-97 1-106 106-154 15,000 5 ,0 00d

pH 6.7-8.3 6.0-8.1 n.a. n.a. 6.5-8.5d

Microorganism colonies per n.a. 0-10,000 n.a. 0 n.a.milliliter

Coliform bacteria per 100 18-90 0-43 .1-1380 10 (e)milliliters

n.a. Data not available.a/ PAHO standards are maximum acceptable concentrations.b/ Unless otherwise noted, United States standards are maximum permissible levels in public water systems.c/ Action level.d/ Secondary maximum permissible levels in public water systems. Secondary standards are recommendations

only, and are not based on health impacts, but rather on issues of taste or appearance.e/ No more than 5 percent of samples per month may be positive. For systems collecting fewer than 40 samples

per month, no more than one sample per month may be positive.

Source: Analyses are by MeAna Konsult Laboratories, Sweden.

24 Setting Prioritiesfor Environmental Management: Mining in Bolivia

Air pollution

Dust is a problem in many mining towns, from traffic, emissions from crushing plants, and windblowing across the dry Altiplano. Data from Tierra show that the dust contains silica (Si02 ) insmall particle sizes (2-5 microns). Exposure to silica dust in high concentrations, such as arefound within mines, can cause silicosis. Dust in mining towns may also contain heavy metals inhigh concentrations, especially zinc, but also lead, cadmium and arsenic. Among the greatestcontributors to ambient dust are vehicles traveling along unpaved roads. Roads in mining townshave typically been built with mine tailings and waste rock, and analyses show that road dustcontains very high levels of lead, arsenic, and cadmium - often higher than cultivated soils (seeTable 3).

Still, the impact on health due to exposure to ambient dust of the type found in mining towns isnot certain. For the most part, the large particles typical of road and wind-blown dust are toolarge to enter deeply into the respiratory system, where they cause the most damage.3

Unfortunately, there are no data at present regarding either ambient air pollution, or healthconditions to provide an indication of the extent to which airborne dust is affecting health.

In some communities indoor air pollution may threaten health. Indoor air pollution is morelikely to be a problem in smaller, rural mining communities, where biomass is used for heatingand cooking, than in the larger towns, such as Sol or Potosi, where natural gas or electricity arewidely available.

Table 3 Heavy metals in soils in Tierra and Luna compared with critical and backgroundlevels (micrograms per gram dry weight)

Tierra Luna

Cultivated soil Road dust Cultivated soil Critical levelsa Background levelsb

Lead 13-970 240 1.2-2.0 1,000 11-30

Cadmium .3-54 66 1.8-27.3 n.a. 0.12-0.15

Arsenic 70-1000 130 1.4-25.6 500 17-24

a/ Critical levels are levels considered potentially dangerous to human health. The figures are from World HealthOrganization Regional Office for Europe 1987; Hutchinson and K. Meema 1987.

b/ Background levels are for this region.n.a. Data not available.Source: Analyses are by MeAna Konsult Laboratories, Sweden.

3 Particles below 10 microns in diameter (PM,1 ) and especially below 2.5 microns pose the greatest threat tohealth, since they can be breathed deeply into the lungs. This fine particulate pollution comes mainly fromcombustion sources, rather than from wind or traffic.


Soil and crop contamination

Soil contamination. As would be expected, concentrations of metals in agricultural soils varygreatly depending on the location of the fields relative to the mine. Some soils sampled in Tierracontained concentrations of lead as high as 970 micrograms per gram, compared with abackground level of 16 micrograms per gram. Soils in Tierra and in Luna also contained levelsof arsenic considered by scientists to be unsafe for food cultivation. In both communities, theaffected soils lay adjacent to tailings or waste rock piles or next to busy roads, and do notindicate wide-spread contamination of the area.

Contaminated soil may pose a threat to health not only through food, but also through directcontact. Children playing on dirt with high concentrations of lead, arsenic, cadmium, or zincmay ingest large doses of these metals by putting hands covered with dust in their mouths.

Crop contamination. Analyses of the tissues of plants grown in Luna show that some types ofcrops are much more affected by metal contamination than others. Of the crops tested, quinua isthe one most affected by metal contamination. Quinua grown on a site near a busy roadcontained high levels of lead, but barley from the same field contained only trace amounts.Quinua grown downwind of a sandy tailings pile contained higher levels of cadmium and arsenicthan potatoes or barley grown on the same field. Interestingly, metal concentrations in quinuawere not related to soil concentrations. Rather contamination appears to have come from thedeposition of airborne particles, with vehicle exhaust the source of lead, and windbome dust thesource of cadmium and arsenic.

Table 4 Heavy metals in crops in Luna compared with critical and background levels(micrograms per gram dry weight)

Quinua Potatoes Barley Critcal levelsa Background levels

Lead 0.8-2.7 0.02-0.03 0.05-0.5 n.a. n.a.

Cadmium 0.08-0.9 0.02-0.4 0.04-0.3 0.1 n.a.

Arsenic 0.6-8.9 <0.05 n.a. 10.0 1.0

n.a. Data not available.a/ Critical levels are levels considered potentially dangerous to human health. The figures are from World Health

Organization Regional Office for Europe 1987; Hutchinson and Meema 1987.b/ Poposed WHO/FAO limit value.

Source: Ministerio de Desarrollo Sostenible y Medio Ambiente, Secretaria Nacional de Mineria, SwedishGeological AB 1995. Laboratory analyses are by MeAna Konsult Laboratories, Sweden.


The crop second most affected by metal contamination is potatoes. By contrast to quinua, levelsof cadmium in potatoes are closely correlated with soil concentrations. Table 4 showsconcentrations of lead, cadmium, and arsenic found in crops grown in Luna.

Physical hazards due to past mining operations

Old mining operations often leave behind considerable physical hazards which threaten thehealth and safety of human beings and animals. These differ by site, but include hazards such asthe collapse of old tailings dams or piles, erosion or landslides, and land subsidence. In addition,unsecured mine entryways, abandoned buildings and machinery, and discarded explosives andequipment may lead to injury or death.

CHOOSING PRIORITY INVESTMENTS AND ACTIVITIES

In general, the priority problems are those causing significant damage to human health, economicinfrastructure or ecosystems, and for which cost-effective control is possible. In Bolivian miningtowns the most serious problems are likely to be microbiological contamination of drinkingwater, lead in various media, airborne dust, and cadmium and arsenic in the environment. Ifthere are available reasonable cost investments which reduce the incidence of water-bornediseases, cases of elevated blood-lead, and morbidity and mortality associated with exposure toairborne dust or heavy metals, these are likely to provide significant benefits to human health andthe economy.

For each problem, a variety of interventions are available to reduce the impacts of the pollution.The interventions may include remediating the source, intercepting the pathway, or controllingthe exposure. For example, to protect against disease from contaminated drinking water causedby corrosion of piping, options include purchasing bottled water, boiling water, chemicallytreating water, and using acid-resistant piping for the water distribution system, in addition toremediating the source of pollution. The best interventions are those which alleviate the impactsof pollution both effectively and at low-cost.

For many Bolivian mining towns, remediating contamination from past mining activities maynot be a cost-effective solution to reducing the most immediate risks to health due toenvironmental pollution.4 For example, it may be more cost-effective to provide drinking waterfrom deepwater aquifers than to remediate all sources of acid rock drainage that are makingsurface water bodies unfit for drinking water. Furthermore, many rivers in the Altiplano containvery high natural levels of arsenic, lead, and copper, so remediating sources of contamination

4 The most effective and lowest-cost approach to protect health from mining pollution is to prevent thegeneration of acid rock drainage and other sources of mining pollution before they have begun. However, wherethere are already many sources of mining pollution, it may be more cost-effective to intercept the pathway orcontrol exposure than to remediate all sources of pollution.


will not make their water usable for drinking. To reduce exposure to airborne dust, it may beboth more effective and lower-cost to seal or pave urban roads than to cover or move tailingspiles. Paving the roads would provide, in addition to health benefits, the benefits of lowertransportation costs, reduced cleaning costs and the amenity values associated with havingcleaner air.

In most Bolivian mining towns, the primary reason to remediate past contamination from miningwould be to protect ecosystems rather than to protect human health. However, restoring aquaticecosystems is often very difficult to achieve; it may be necessary to completely (or nearly so)remediate a very large percentage of all the sources of contamination - including nonminingsources - before the streams or rivers could support breeding populations of fish. Achievingthis goal would require the remediation, control, and management of all sources of pollutionwithin a watershed (of course measures to protect human health would also contribute toprotecting aquatic habitats). While there are many long-term benefits to restoring ecosystems,these benefits may take decades to realize, and are extremely costly to implement.

It should be noted that, many of the old tailings and waste rock piles contain relatively highconcentrations of metals, which could be re-mined profitably with the new heap leaching andbatch leaching technologies.5 It would make little sense to cover or move such wastes until it isdetermined whether they have economic value. Furthermore, remining can contribute toenvironmental cleanup, since the material must be moved for re-processing, which can be carriedout with modem environmental controls. Indeed, in some circumstances, it may make sense tore-mine old tailings or waste rock even if this would not be profitable, if the economic benefits ofremediation were sufficiently high. Specific guidelines are provided in the workbook.

Still, remediation activities may be worthwhile in some places. Where acid rock drainage isclearly damaging infrastructure, such as in Sol, there may be low-cost activities which can reducethis damage. Where groundwater or sensitive ecosystems are threatened, it may be worthwhileto try to prevent spreading of the damage.

SITE-SPECIFIC PROPOSALS

Priorities for environmental improvement will depend on the characteristics of specific sites andon the needs and values of the local residents. The COMIBOL mining communities varyconsiderably in terms of their populations, likelihood of attracting private investment, location,existing infrastructure, size and importance of informal mining cooperatives, environmentalconditions, and future viability. The proposals below represent our current judgment as to whatinvestments will provide the greatest benefits for the resources used, based on preliminary

5 The heap or batch leaching technologies have existed for only about a decade. They have made it possibleto extract metals from ores previously considered worthless. New heap leaching and batch leaching facilities arealready operating in Potosi and in Sol.


infonnation. Most of the proposed investments would provide quick paybacks (3-5 years), sowould be appropriate for mining communities whose long-term futures are uncertain. Finaldecisions should be made after discussions with communities and the collection of more data.Recommendations for further investigation: Sol

With a population of about 100,000, Sol is the largest COMIBOL mining community. Beforebeing closed in July 1992, its Javiar mine had been operating for over 400 years, first as a silvermine, and later as a tin-silver-zinc mine. Over its long history, the mine operated with limitedenvironmental controls, and with little concern to separate residential and commercial areas frommine waste or acid rock discharges. Indeed, houses, churches, stores, markets, and workshopshave been built directly on top of old tailings and waste rock piles. Local residents are likelyexposed daily to lead in the air and in food and through direct contact with contaminated soil. Inaddition, acid rock drainage has likely contributed to the corrosion of infrastructure of Sol. Low-pH water hastens the corrosion of pipes made of zinc, concrete, iron, or copper-which canpermit sewage to contaminate drinking water supplies. Acid water also has the capacity toweaken building foundations constructed of carbonate material.

While the mine had been the major source of employment for Sol, the city is developingalternative sources of employment in manufacturing, food and beverage processing, metalsmelting, and brick making. In addition, Sol is the commercial center and transportation hub forthe Altiplano, being located on major transportation routes between La Paz, Sucre, Potosi, andChile.

Sol would be an ideal location for a pilot project to improve environmental conditions in miningcommunities in Western Bolivia. There are four reasons why. First, past mining activities in Solpose significant risks to human health and the environment, both because of the numbers ofpersons affected, and because of the nature of mining-related pollution at this site. Second, thecity has a viable future, so inhabitants will benefit far into the future from investments madenow. Third, the mine is unlikely to attract private investment. Therefore there is littleexpectation that private investors could undertake activities for environmental improvement.Fourth, there is more information available about environmental conditions and human healthimpacts than for any other mine site in Bolivia. Sol has been the site of the Sol Pilot Project, anintensive research project6 begun in 1993 to obtain data on the impacts of mining pollution on theambient air, groundwater, surface water, ecosystems, infrastructure, and human health. Thisinformation can form a sound basis for deciding on investments in environmental improvement.

The top priority environmental investments for Sol are likely to be:

6 The Sol Pilot Project is being financed by the Swedish government and IDA under the Mining SectorRehabilitation Project.


Repairing or replacing pipes delivering drinking water to the town. These pipes havebecome corroded-probably at least partly through exposure to acid waters draining fromthe mine and surrounding tailings and rock piles-and sewage now contaminates thedrinking water supplies. Repairing the pipes would increase both the quality and thequantity of drinking water, both of which would provide health benefits. Better qualitywater would provide direct benefits through a reduction in exposure to contaminants,while greater quantities of water would provide water for washing hands, dishes, utensils,foods, household goods, and personal hygiene to remove the residue of contaminateddust and dirt. Repairing the pipes would also reduce costs of pumping, treating, anddistributing water as a result of lower water losses.

It is estimated that the project would reduce the incidence of diarrheal diseases amongchildren by 25-50 percent. This would be valued at (a) the cost of medical care for eachincidence delivered at the local health clinic (the cost of medicine plus the cost of medicalservices), and (b) the cost of mother's time to care for the sick child. The benefitsassociated with reduced water losses would be the costs of electricity and chemicalssaved.

2. Sealing playgrounds and other play areas that have been built on mine waste material(or alternatively removing and replacing the dirt, for example dirt surrounding houses).This would prevent children from being exposed directly to the lead, arsenic, cadmium,and zinc contained in this material. The project would reduce the number of cases of leadpoisoning, and of diseases associated with exposure to other toxins. For lead, the benefitswould be valued as (a) the cost of medical care, (b) the cost of mother's time to care forthe sick child, and (c) the value of reduced life-time earnings resulting from reduced IQ.

3. Controlling the dust from the roads within the town which have been constructed withmine waste. Traffic along these roads is the primary source of metal-laden airborne dust.The project would reduce the number of respiratory diseases and other diseases caused byexposure to airborne lead and arsenic. These health benefits would be valued as (a) thecost of medical care, (b) the value of time lost from work, (c) the willingness to pay toreduce discomfort from the diseases, and (d) the value of premature mortality. Pavingtown roads would also provide benefits by reducing transportation costs and the costs ofcleaning, and by generating amenity values.

4. Remediating physical threats left by old mine operations. This would entail stabilizingslopes, sealing old shafts and adits, removing abandoned explosives and equipment, etc.The project would reduce the risk of accidental injury and death. The benefits would bevalued as the willingness to pay to reduce this risk, often expressed as the value of astatistical life.


5. Providing education and technical assistance to improve decisionmaking forenvironmental management. For example, a mechanism is needed for regulating newmining operations at Sol to limit future environmental damage. This mechanism shouldinclude procedures for permitting, inspection, enforcement and comprehensivereclamation for new mining operations.

Technical assistance is also needed to develop an environmental monitoring programwhich would collect data on ambient environmental conditions and on human healthimpacts. For example, it would be very useful to have information regarding blood leadlevels of the inhabitants, so that decisionmakers know whether or not lead exposure is infact damaging health in Sol.

Finally, technical assistance is needed to model the hydrology of the Sol watershed todetermine if contamination of the shallow aquifers is threatening the deep-water aquiferswhich may in the future be a source of drinking water for the municipality.

6. Channeling and treating acid rock drainage. The mine drainage is an important sourceof very acid waters which are believed responsible for hastening corrosion of pipes andbuilding materials in the urban area. In addition, the mine drainage is believed to be asignificant source of contamination of Lake Crist6bal and of the shallow aquifers in theSol environs. The project would lengthen the lifetime of the underground pipes, reducebuilding repair costs, and reduce the flow of contamination to both Lake Crist6bal and theregion's aquifers. These would be valued based on (a) the incremental increase in theprojected lifetime of a new water and sewerage system, (b) the reduction in buildingrepair costs, (c) the willingness to pay to reduce the risk that contamination will reach thedeep aquifers, and (c) the willingness to pay to restore the fisheries at Lake Crist6bal andimprove the lake's amenity value.

7. Moving the Domingo dump, reshaping the old site, and constructing ditches to collectacid rock drainage. The Domingo waste rock dump is a major source of acid rockdrainage which damages urban infrastructure and contaminates the region's shallowaquifers. In addition, located in the center of the city, the Domingo dump has been usedas a building site for houses, churches, commercial and manufacturing enterprises andother urban dwellings (the surface of the dump is clearly exposed in some unpaved streetsand backyards). Inhabitants of the city come into direct contact with lead, arsenic,cadmium, zinc, and copper contained in the material. The project would reduce humanhealth damage due to exposure to heavy metals in the soil. In addition, the project wouldlengthen the lifetime of the underground pipes and building foundations, and reduce theflow of contamination to both Lake Crist6bal and the region's aquifers. Finally, theproject would make available uncontaminated land for urban development in the centercity. These would be valued as (a) the benefits of reduced health damage from lead andother heavy metals in air and soil; (b) the benefits of reducing damage to infrastructure,


aquifers, and ecosystems (see point 6, above); and (c) the increase in the quantity andquality of land available for building sites in the city.

Alternatively, it may be possible to cover the Domingo dump in situ. This solutionwould produce the same benefits as moving the dump, with the exception of improvingthe value of the property.

Before pursuing this activity it will be necessary to assess the economic feasibility ofremining the material for silver. The new operator would then carry out environmentalremediation in conjunction with the remining activity.

Recommendations for further investigation: Luna

Luna is a relatively isolated mining community, situated in the mountainous terrain of theEastern Cordillera, 50 kilometers southeast of Sol. With an annual precipitation of around 500millimeters per year, vegetation in the area is scarce, and there are almost no trees. The Lunariver drains the area, joined by many small streams which flow only during the rainy season,November to March. There are no nature reserves in the vicinity of Luna, nor, so far as weknow, any endangered species.

Luna has a population of around 12,000, nearly all of whom are dependent directly or indirectlyon mining for a living. COMIBOL employs about 350 people, down from a workforce of over1,000 in 1992. About 1,200 inhabitants, including former COMIBOL workers, are organizedinto cooperatives, and earn small incomes extracting metal from waste rock and tailingsdischarged from the mill.

Neither the climate nor the fertility of the soil are conducive to farming, so very little agriculturetakes place in the region. Most food is trucked in from Sol or Cielo. A few families maintainfarm plots to raise crops for home consumption. Some families also maintain small herds ofllamas and sheep.

The prospects for Luna are very different than for Sol. The mine in Luna is very rich and has thepotential to be highly profitable if operated with modern equipment and management practices. Itis thus very likely to attract new investors who will be able to undertake some responsibility forremediating old mining waste and for improving environmental conditions in the community.New investors may also demand that COMIBOL remediate the site in order to reduce theirexposure to liability in the future. COMIBOL therefore will want to delay investing all but smallsums for cosmetic improvements in Luna, until it becomes clearer what private investors can andwant to do.

Based on infornation contained in the environmental audit, the top priority environmentalinvestments for Luna are likely to be the following. Note that the first five recommendations are


similar to those made for Sol and are presented here in an abbreviated form. For moreinformation on how to value the benefits see recommendations for Sol, above.

1. Repairing or replacing pipes delivering drinking water to the town.

2. Sealing playgrounds and other play areas that have been built on mine waste material(or alternatively, removing and replacing dirt, for example surrounding houses).

3. Controlling the dust from the roads within the town which have been constructed withmine waste.

4. Remediating physical threats left by old mine operations.

5. Providing education and technical assistance to improve decisionmakingforenvironmental management.

6. Activities to remove impediments to private investment. In some cases, private partnersmay require COMIBOL to remediate contamination from past mining activities as acondition of their investment in order to reduce their exposure to risks of liability in thefuture. For example, private investors might require that COMIBOL remove or treatsources of contamination upstream the mine operations, to prevent the possibility of laterbeing held responsible for contamination that occurs downstream the mine. The benefitswould valued as the incremental increase in the value of the mine property at Luna.

7. Constructing a sewage collection system. In Luna, sewage waters run freely throughopen channels through town to an area of cooperative mining. Men, women, andchildren come into direct contact with this contaminated water, standing in the river andprocessing their ores. This is posing a health risk to the workers by exposing them tobacteria, fecal coliform, and other disease-causing agents. The benefits of the projectwould be the reduced incidence of waterborne diseases, and the amenity values associatedwith living in a cleaner environment. These would be valued as (a) the cost of medicalcare, (b) the cost of days lost from work, (c) the willingness to pay for a cleanerenvironment.

8. Ventilating the mine. The ambient air in the underground mine at Luna is heavilycontaminated with radon, which causes lung cancer, and with silica dust, which causessilicosis.7 Ventilating the mine would significantly reduce the incidence of both thesediseases. The benefits would be valued at (a) the cost of medical care; (b) the cost ofdays lost from work; and, in the event of a fatality, (c) the value of premature death.

7 Available data from studies carried out by INSO and others indicate that silicosis is the major healthproblem among miners of the hard-rock mines of Bolivia. The recent environmental audit carried out for Luna didnot investigate the level of silica dust in the air.


Recommendations for further investigation: Tierra

Tierra is a relatively small, isolated mining community, in mountainous terrain, 75 kilometersnortheast of Sol. Vegetation in the area is scarce and there are almost no trees. Nearly allTierra's population of 21,000 is dependent on mining for a living, and work either as miners or inactivities which support the industry. COMIBOL's mining and milling operations employ about350 people, down from a workforce of 700 in 1994. An additional 700 miners work the upperlevels of the mine as artisanal miners organized into cooperatives under agreement withCOMIBOL. A few families cultivate fields or maintain herds of sheep and llamas to supplementtheir incomes from mining. Only a few families live downstream from the mine, since the steepmountain slopes are largely unsuitable for farming.

Like Luna, the Tierra mine contains a rich tin deposit, and is likely to attract new privateinvestment. COMIBOL should delay expending resources for remediation until it becomes clearwhat arrangement can be made with a new operator.

The top priority environmental investments for Tierra are likely to be the following. Note thatthe first six recommendations are similar to those made for Sol and are presented here in anabbreviated form. For more information on how to value the benefits see recommendations forSol, above.

1. Activities to remove impediments to private investment.

2. Repairing or replacing pipes delivering drinking water to the town.

3. Sealing playgrounds and other play areas that have been built on mine waste material (oralternatively, removing and replacing dirt, for example surrounding houses).

4. Controlling the dust from the roads within the town which have been constructed with minewaste.

5. Remediating physical threats left by old mine operations.

6. Providing education and technical assistance to improve decisionmaking for environmental.

7. Constructing a sewage collection system. In Tierra, sewage waters run freely through openchannels through town to an area of cooperative mining. Men, women, and children comeinto direct contact with this contaminated water, standing in the river and processing theirores. This is posing a health risk to the workers by exposing them to bacteria, fecalcoliform, and other disease-causing agents.


8. Stabilizing the San Marco tailings dam. The San Marco tailings dam is unstable and indanger of collapse which could result in significant human injuries and deaths anddestruction of infrastructure. The project would reduce the risk of this destruction. Thebenefits would be valued as the willingness to pay to reduce this risk.

9. Identifying the sources and pathways for mercury contamination. If the studies find mercurycontamination to be a significant threat to human health or the environment, then a prioritywould be addressing it by teaching and training, providing alternative technologies, ordeveloping an institutional solution, such as fencing the affected area or prohibiting theremining of old mine tailings. This would reduce the incidence of mercury poisoning. Thebenefits would be valued at (a) the cost of medical care; (b) the cost of days lost from work;and, in the event of a fatality, (c) the value of premature death.

The above recommendations and the jurisdictions for their implementation are summarized inAnnex 6.

CAVEATS

Even under the best of circumstances, remediating mine sites is a complex and challenging task.The mining history, topography, climate, hydrology, and geochemistry of each site are unique.Water is the primary pathway for the transport of mining-related pollution; limited informationabout the hydrologic regime at these sites makes it difficult to predict with certainty themagnitude of the risk facing human populations, the extent of the degradation, or the efficacy ofthe proposed remedies. Additionally, at each of these sites, there are multiple sources ofcontamination, both man-made and naturally occurring, which are causing environmentaldegradation. Thus improvements in water quality, and subsequently human health, may not berealized with the remediation of a single source.

Site-specific mineralogy and processing techniques affect both the toxicity and thebioavailability of contamination due to mining. Detailed site characterization, coupled withepidemiological studies, are necessary to accurately identify the risks to human health in thesecommunities, and consequently, the remedies which will achieve the greatest benefits. Thebaseline data are also essential to measuring the performance of selected remedies. Flexibility inchoice of remedy, and incremental implementation of remedies will increase the likelihood ofsuccess while reducing the risk of wasting resources.

Annexes

Annexes 1-5 provide the worksheets for selecting priority sites, chapter 2. Annex 6 summarizesthe site specific recommendations developed in chapter 3 on selecting priority investments andactivities. The workbook following the annexes provides details on how to calculate benefits ofspecific investment options. Sources for all tables, unless otherwise noted, are authors'calculations.

35

Annex 1

Hazard Ranking System with Example

Annex 1 presents a spreadsheet for assigning hazard scores to individual mines and, as aniexample, a spreadsheet completed for Tierra mine based on data presented in its environmentalaudit. The Annex contains four sections. Annex lA consists of the mine hazard scoringspreadsheet; Annex 1 B consists of five tables for computing the numeric representing the overallseverity and extent of problems at the site (column 2 of the spreadsheet). Annex 1 C contains thetables for calculating numerics for the numbers or sensitivity of the recipients of exposure(columns 3, 5, and 7). Annex ID contains an example of the methodology applied to Tierramine.

How to use the spreadsheet

Damage to human health and plant and animal life depends on exposure to metals or chemicalsor to physical hazards. In column 1 of the spreadsheet, the analyst notes whether the hazard islikely to exist. If the substance is very likely to exist, the analyst assigns a score of 2, if it islikely to exist only in small quantities, he gives a score of 1, and if it is unlikely to exist, he givesa score of 0. Minerals which were mined at the site should in general receive scores of 2 (verylikely to exist). Minerals or chemicals that are found in association with the primary metals butwhich are not themselves the target of mining activities, receive scores of 1 (likely to exist insmall quantities). In Bolivia, arsenic and cadmium are common by-products of mining activities,so in almost all cases receive scores of 1.

If the substance is likely to exist, the analyst needs to know in what quantities, since damagedepends on dose or concentration of exposure. The concentrations of metals or chemicals likelyto cause damage varies, depending on the substance. For some substances, damnage will notoccur until after exposure to a minimum quantity for a minimum duration or a threshold dose.For other substances, for example carcinogens, no safe threshold level exists, and impacts areapproximately linear with exposure. Together, columns 2 (severity and extent of the problem),and columns 4, 6, and 8 (hazard rankings of the chemicals and metals), provide an indication ofwhether the substance is likely to be damaging health, economic infrastructure, or environment.

For column 2, the analyst estimates the seriousness of environmental contamination using thenumerics provided in Tables AIB.I-AlB.5 for each of five key mine characteristics. The sum

37


obtained by totaling the scores for each of the mine characteristics is the number to be enteredinto each row in column 2. The maximum number for column 2 is 10. The characteristics mostimportant for estimating both chemical and physical hazards are (1) type of commodity, (2)current status, (3) years of operation, (4) size of production, and (5) mill type. Mines which arecurrently operating will likely have higher ambient concentrations of metals and chemicals thanmines which closed 20 years ago; mines which have operated over many years will likely bemore contaminated than mines that are new, large mines will have more contamination thansmall mines, mills using flotation methods will likely generate worse contamination than millsusing gravitation methods. Totaling the individual scores for each of these categories willprovide a score for the overall extent and severity of environmental contamination from the minesite. This value is meant to provide a means of ranking mines relative to one another in terms ofpotential contamination, rather than to identify the contaminants likely to be causing the mostdamage.

Finally, columns 3, 5, and 7 (number of persons exposed, extent of damage to materials,buildings, etc., and sensitivity of exposed ecosystems) provide an indication of the quantity ofthe damage. Lead contamination is more serious in populated areas than in uninhabited regions,for example. Annex 1, Tables AlC.1-AlC.3 contains numerics for population sizes, value ofdamage to economic infrastructure, and sensitivity of ecosystems. There is one table associatedwith each of columns 3, 5, and 7. The number obtained using the tables is entered into each rowof the colunmn.

Calculating hazard values

Each row in the table - representing each of the separate chemical or metal hazards - receivesa score based on the potential of that substance to be damaging health, physical structures orecosystems. The value for each hazard is computed as follows:

(column 1 x column 2) x [(column 3 x column 4) + (column 5 x columnn 6) + (column 7 xcolumn 8)] = column 9.

The individual row scores provide an indication of how potentially damaging a particular hazardis likely to be relative to other hazards at the site, thereby providing guidance on priorities for therisks to be addressed. The site total, computed as the sum of the row scores, provides a measureof the overall hazard potential of the mine relative to other mines. Sites with the highest scorespotentially pose the greatest threat to human health, economic infrastructure and theenvironment. These are the priority sites for further investigation.

Annex 1A.1 Mine hazard scoring worksheet

Mine name

1 2 3 4 5 6 7 8 9

Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Rowexist?a and extent persons hazard damage to hazard of exposed mental score

ofproblem exposed ranking materials, ranking ecosystems hazardl ~~~~~~~~buildings, ranking

Hazard et

Chemical or metal hazards

Lead 9 3

Mercury 9 4

Arsenic 8 2

Cadmium 7 3

Zinc 2 2

Silver 2 2

Acid generation 0 3

Cyanide 2 3

Physical hazards 9

SITE TOTAL

a/ Very likely = 2; possible in small quantities 1; Not likely =0.


Annex 1B Key mining characteristics for estimating extent and severity of contamination

Table AlB.1 Type of commodity produced Table AIB.2 Current status

Value Value

Lead 2.0 Currently operating 2.0

Zinc 1.0 Closed within last 10 years 1.7

Silver 1.0 Closed 20 to 30 years ago 1.3

Tin 0.4 Closed 30 to 40 years ago 1.0

Closed 40 to 50 years ago 0.7

Closed more than 50 years ago 0.3Table A1B.3 Number of years operating

ValueOver 100 years 2.0 Table A1B.4 Size of production

Between 60 and 100 years 1.6 Total metric tons Value

Between 40 and 60 years 1.2

Between 20 and 40 years 0.8 Large: > 1 million 2.0

Between I and 20 years 0.4 Medium to large: 500,000-1 million 1.7

Medium: 250,000-500,000 1.3

Small to medium: 10,000-250,000 1.0Table A1B.5 Mill type Small: 1,000-10,000 0.7

Value Very small: < 10,000 0.3

Amalgamation 2.0

Arrastre 1.2

CIP 2.0

Crusher (only) 0.4

Cyanidation 2.0

Flotation 2.0

Gravity 1.2

Heap leach 2.0

Jig plant 1.2

Leach 2.0

Retort 2.0

Stamp 1.2

Unknown/possible 1.0

No mill 0.4

Hazard Ranking System with Example 41

Annex 1C Population, infrastructure, and ecosystems exposed

Table A1C.1 Exposed population

Value

< 10,000 1

10,000-20,000 220,000-30,000 330,000-40,000 440,000-50,000 550,000-60,000 660,000-70,000 770,000-80,000 8> 90,000 9

Table A1C.2 Exposed buildings and materials

Value

Mine isolated from buildings and materials 1Some buildings and materials exposed 5Extensive urban infrastructure - As Sol 9

Table A1C.3 Sensitivity of exposed ecosystems

Value

Mine isolated from major water bodies 1Mine contaminants drain into streams or river 5Mine drainage affects sensitive ecosystems - as Lake Poop6 9

Note: Values for infrastructure and ecosystem exposure (Tables AIC.2-AIC.3) may be between 0 and 9.The values in the tables are meant to represent extreme points on the continuum.

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Annex IC Example: Tierra mine

The Tierra mine has produced three minerals since it was first exploited in the mid-i 800s: silverfollowed by tin and zinc. The mine is still operating, currently producing tin and zinc. Over themine's long history, workers have extracted over 1 million metric tons of ore. A mill on theproperty currently produces concentrates of both zinc and tin using flotation methods.

Column 1: Is the hazard likely to exist?

The analyst begins by completing column 1, using judgment regarding whether or not aparticular hazard is likely to exist on the site. Because the mine has been in operation almost 150years, and because it has produced silver, lead and zinc, nearly all hazards are likely to exist onthe site except cyanide and mercury. Cadmium and arsenic receive scores of 1, since they existin conjunction with the primary minerals at the site.

Column 2: Calculating the extent and severity of contamination

The five tables presented in Annex lB are used to calculate the value for extent and severity ofthe contamination. The following table summarizes the values obtained from each of the fivetables.

Value

Table AIB.1: Commodity Tin 0.4Zinc 1.0

Table A1B.2: Current status Operating 2.0

Table A1B.3: Years of operation Over 100 years 2.0

Table AlB.4: Size of production Over 1 million metric tons 2.0

Table A1B.5: Mill type Flotation 2.0

TOTAL 9.0

For categories with more than one potential value, the higher value prevails. In this example, thevalue for zinc prevails, since zinc has a higher value than tin. The number 9 is entered into eachrow of column 2.

Hazard Ranking System with Example 43

Column 3: Calculating values for number ofpeople exposed

According to the Tierra mine environmental audit, about 21,000 people live in the catchmentarea of the mine, and are potentially exposed to contamination generated from mining acti-vities.Annex 1C, Table A3.1 contains a table providing numerics for different population sizes. Apopulation of 21,000, as in the case of Tierra, receives a value of 3. This number is entered intoeach row of column 3.

Column 6: Calculating the extent and severity of damage to buildings, materials, and the like

Annex IC, Table AlC.2 contains values for damage to buildings, infrastructure or materials.Since the Tierra mine drainage does not extensively affect buildings or materials, and receives ascore of 2 for this category, to be entered into each row of column 6.

Column 8: Sensitivity of exposed ecosystems

Annex 1C, Table A1C.3 contains values for sensitivity of exposed ecosystems. While thedrainage from the Tierra mine does enter nearby surface water sources, it does not affectparticularly sensitive ecosystems. The mine receives a score of 3 for this category.

Applying the hazard value formula described in the previous section, the score for lead at Tierrais: (2 x 9) x [(3 x 9) + (0 x 2) + (3 x 3)] = 648. This is the highest score for any row on thespreadsheet, suggesting that lead is potentially the most serious environmental hazard at Tierra.Performing similar calculations for all rows, produces a total hazard score for Tierra mine of2,340. This is rounded off to 23 for comparison with other sites.

43

Table A1D.1 Mine hazard scoring worksheet: Example

Mine name

Tierra

1 2 3 4 5 6 7 8 9Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Rowexist?a and extent persons hazard damage to hazard of exposed mental score

of problem exposed ranking materials, ranking ecosystems hazardbuildings, |lranking

Hazard elc


Lead 2 9 3 9 3 648

Mercury 0 9 3 9 2 3 4 0

Arsenic I 9 3 8 2 3 2 270

Cadmium I 9 3 7 2 3 3 270

Zinc 2 9 3 2 2 216

Silver 2 9 3 2 2 216

Acid generation 2 9 3 0 2 3 3 234

Cyanide 0 9 3 2 23 3 0

Physical hazards 2 9 3 9 2 3 486

SITE TOTAL 2,340

a, Very likely = 2; possible in small quantities = 1; Not likely =0.

Annex 2

Rapid Site Assessment

Objective

The objective of the Rapid Environmental Assessment is to collect readily available informationwhich can be used to (1) confirm the initial identification of the site as having potentiallysignificant impacts; and (2) define the data needed to estimate the damage to health, ecosystemsand economic infrastructure caused by contamination and physical hazards at the site. Thefollowing sections list the key points to be addressed in carrying out the assessment.

Define the scope

Define the boundaries of the site. For a mine this is the area that is under the effective control ofthe enterprise and may be defined by legal boundaries or by practical considerations. A mapshould be provided showing the boundaries adopted for the purposes of the Assessment. Detailsof ownership and current level of operations should also be provided.

Identify the surrounding areas. Identify on the map and provide description of the areas thathave probably been affected by contamination from the site. This is clearly a question ofjudgment but where there is limited data, the scope considered should be around ten kilometers.

Describe the site

The site under consideration (usually a mine) should be described under the following broadheadings. (These headings are provided as guidance - where appropriate they should beadjusted to reflect the reality on the site.)

Physicalfeatures and infrastructure

* Entrances and adits* Concentrators and other processing facilities* Tailings dams* Waste heaps (desmontes and colas)

45


* Offices and stores* Railways and conveyors* Roads* Water supply (and sanitation) systems* Pumping stations and other plants

Human activities (specify whether the activity is supported by the mine, the cooperatives, orother)

. Housing* Schools* Shops and other facilities* Clinics* Areas of extraction and/or processing* Pumps or other plant* Agriculture* Livestock

Sources of pollution (both related to ongoing operations and those that would continiue even ifthe mine stopped operations). Note those parts of the site which have been identified as actral orpossible sources of pollution - outlets from drainage systems, concentrator discharges, majorunderflow from tailings heaps, and the like.

Releases from the site. Identify major points of release from the site (rivers, etc.) and obtaincopies of whatever data is available on air or water releases from the site.

Describe the surrounding area

The size of the area affected will vary according to site specific characteristics such as thenature of the water basin, the composition of the host rock, and the prevailing wind patterns. Ingeneral, the areas affected by airborne particles and gases would be ten kilometers downwind,and the area affected by waterborne contaminants, ten kilometers downstream. To estimatedamage caused by mining activities, analysts should note the presence of the following withinthe likely area of influence:

* Housing and facilities such as schools, shops etc.* Agricultural activity: types of crops being grown, the presence and extent of grazing;* Irrigation of agriculture: availability of water and source of water supply;* Use of river water for domestic drinking water supply (or of shallow groundwater

associated with the river);* Fishing for food.

Rapid Site Assessment 47

In all cases, the description should be as quantitative as possible.

Identify the key pathways andpossible impacts

The major pathways expected to result in health or other damage are described underStage 3 of the methodology. Evidence that pollutants are affecting human health, economicinfrastructure, or ecosystems through any of the pathways should be noted. In addition, anyevidence of physical damage to crops, building materials or underground piping, or to fisheriesshould be described or documented in as much detail as possible (all references should also becarefully noted for later follow up).


Table A2.1 Rapid site assessment form

Mine name Date of Visit

1. Nearest sites of human activity (distance)

Dwellings

Workplaces

Main road

Schools

Commercial enterprises

Clinics

Agricultural fields

Livestock

Other

2. Major physical structures and urban infrastructure

Yes No Ifyes, describe and give distance

Settlements

Underground piping

3. Sensitive environments


Wetlands

Fisheries

Other


Table A2.1 Rapid site assessment form (cont.)

4. Water bodies within 3.5 kilometers of site


Stream

River

Pond

Lake

5. Airborne pollutants

Yes No Ifyes, describe

Dust

Smoke

Haze

Other

6. Evidence of contamination or damage

Describe in detail

Agricultural fields yellow or unhealthy?

Buildings eroded?

Underground piping corroded?

Evidence of contaminated water?

Evidence of damaged fisheries?



7. Physical hazards found at site

Yes No If yes, describe, giving size, condition and specificlocation, and indicate whether the feature is likelyto represent a physical hazard

Explosives

Drums/tanks/bags for chemicals

Chemicals

Overhead wires or cables

Pipes or poles

Power lines

Power substation

Transformers

Scrap metal

Towers

Placer Tramways

Wooden structures

Other



8. Site features

Yes No If yes, describe, giving size, condition and specificlocation, and indicate whether the feature is likely torepresent a physical hazard

Adits

Buildings

Cisterns

Leach pad

Machinery

Mill building

Mill tailings

Ore stockpile

Pit: large (> 3 meter)

Pit: small (< 3 meter)

Placer mine

QuarryShaft

Solution pond

Subsidence

Sump

Trench

Tunnel

Other



8a. Water at features

Standing Emanating or If water is presentpassingthrough

Yes No Yes No Liters! Conduc- pH Colorminute tivity

Adits

Buildings

Cisterns

Leach pad

Machinery

Mill building

Mill tailings

Ore stockpile

Pit: large (> 3 m)

Pit: small (< 3 m)

Placer mine

Quarry ==_=_

Shaft

Solution pond

Subsidence

Sump

Trench

Tunnel

O th e r_ _ _ _ _ _ _ __ _ I _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _



8.b Vegetation at features

Healthy Stressed Dead Barren Partial Full Otherrevegetation revegetation (specify)

Adits

Buildings

Cisterns

Leach pad

Machinery

Mill building

Mill tailings === =

Ore stockpile

Pit: large (> 3 m)

Pit: small (< 3 m)

Placer mine

Quarry__ __

Shaft

Solution pond

Subsidence

Sump

Trench

Tunnel

Other

Annex 3

Chief Pathways and Critical and Background Levels ofKey Contaminants

Estimating the severity and extent of damage requires judgment. Ideally, some data will existregarding the ambient concentrations of harmful metals and chemicals in the air, water, soil,plants, or fish. Annex 3 Table 3.1 shows the chief pathways of the pollutants of concern. Table3.2 lists the ambient concentrations of selected chemicals and metals at which human health andecosystem damage might begin to become significant as well as normal background levels. Thecritical values represent, in almost all cases, significant increases over background levels,indicating contamination from man-made sources.

Table A3.1 Chief pathways of exposure to environmental contaminants

Food

Water Air Soil Crops Fish

Lead Yes Yes, near smelters Yes, near Yes, near Noand roads smelters smelters

Mercury No Yes, near smelters No No Yes

Cadmium Yes, especially in Yes, near smelters Yes, near Yes, near Nomine drainage areas smelters smelters

Arsenic Yes, especially in Yes, near smelters Yes Yes Yesmine drainage areas

Zinc Yes, especially in Yes, near smelters No Yes Nomine drainage areas

Silver Yes, especially in Yes, near smelters No Yes Nomine drainage areas

Acidity Yes, especially in No No No Nomine drainage areas

Cyanide Yes No No No No

Source: World Health Organization Regional Office for Europe I987; Hutchinson and K. Meema 1987.

54

Chief Pathways and Background and Critical Values of Key Contaminants 55

Table A3.2 Critical and background levels of selected metals and chemicals

Drinking water Air Soil Food

critical background critical background critical background critical background

Lead 50 pg/I < 20 pg/I 2 pg/r3 0.00005 1000 pg/g 11-30 gg/g n.a. n.a.pg/rM3 dry weight dry weight

Mercury 2 pg/I 5-100 ng/I 100 ng/m3 5-10 ng/m3 n.a. n.a. 2000 mg/g < 20 ng/gfresh weight fresh weight

Cadmium 10 pg/I .1-2 pg/l 100 ng/m3 5-50 ng/m3 n.a. 0.12-0.15 n.a. n.a.pg/g dry weight

Arsenic 200 g/gA < 10 pg/I 750 ng/m3 1-10 ng/m3 500 pg/g < 17-24 ptg/g 10 mg/kg I mg/kgdry weight wet weight wet weight

Zinc 5000 pg/I n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Silver 100 pg/l n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Acidity pH <4.5 pH 6-9 n.a. n.a. n.a. n.a. n.a. n.a.

Cyanide 100 pg/I none n.a. n.a. n.a. n.a. n.a. n.a.

Note: pg is microgram; ng is nanogram; m' is cubic meter; n.a. is data not available.Source: World Health Organization Regional Office for Europe 1987; Hutchinson, T. and K. Meema (eds.) 1987.

Annex 4

Calculating a Marginal Cost Curve: Example

As an example, a marginal cost approach is outlined for Tierra mine using information containedin the environmental audit. The marginal cost curve cannot be developed fully because of lack ofdata on the engineering costs of the various remedial measures, but the steps of the procedure canbe identified.

The interactions between different metals and between dissolved and suspended phases of thesame metal are very complex and depend on the pH of the water and a number of other factors.Nevertheless, the data provided in the audit report allow some broad findings to be developed.

Two of the heavy metals of principal concern are cadmium and lead (although any other metalcould be addressed in the same manner). Each year about 18 tons cadmium and 318 tons of leadare released to the Rio Tierra.8 Of these total loads, about 12 percent of the cadmium and 2percent of lead is in solution. The dissolved concentrations are 20-50 times higher thanbackground levels in a typical Altiplano stream.9 (Samples show that concentrations havedropped to background levels twenty kilometers downstream.)

To calculate the marginal costs of reducing the loads released from the mine, the analyst mustfirst identify the sources of pollution and estimate their relative contribution to the total pollutionloadings. Next he or she estimates the costs per ton (or other unit of measurement) of reducingemissions from the various sources.

Using information in the Tierra audit, it appears that the sources of dissolved cadmium and leadare different: the Pila mine dump is the source of about 10-20 percent of the total dissolvedcadmium, but less than 1 percent of the lead.'° For lead, the main sources are the town andcooperative areas upstream of the plant and the tailings system, which are responsible for about 5percent of the lead entering the river system. Some mine drainage waters have a high cadmiumcontent - for example La Bora adit has a discharge with a concentration which is 2-40 timeshigher than the others."'

Tierra audit, Table 4.19 Tierra audit, Table 3.8'° Based on Tierra audit, Figure 4.2 and Table 4.1. The exact proportions are not clear.

Tierra audit, Table 3.13.

56

Calculating a Marginal Cost Curve 57

A very high proportion of the total metal load in the river is in the form of suspended solidsrather than dissolved metals in solution. The proportion depends on a range of factors but ismost likely influenced principally by the acidity and the concentration and character of thesolids. The key sources of suspended solids are the tailings from the concentrator plant. Of anestimated 8.7 million cubic meters of waste material in the mine, 85 percent is comprised of thetailings in the dam, the other fine tailings in the Pila waste heap and the sediments in the riverimmediately downstream.'2 The tailings dam alone accounts for 77 percent of the total wastematerial.

Control of the release of metals must therefore address both the dissolved phase and the solids.The audit report identifies six waste heaps (out of 64) with especially high concentrations ofmetals that could enter the environment. Five of these are the fine sediment heaps (including thetailings dam) and the sixth is a smaller waste heap above the town. These fine sediment heapsshould be one of the top priorities of any remediation program.

Remediation actions to be considered should therefore include:

Stabilizing the sediments in the river* Reducing the releases from the Pila dump

Minimizing drainage from the waste heaps to reduce the sulfide and metal levelsStabilizing the tailings dam to avoid releases of overflows and of sediment

* Treating the mine drainage* Improving the capture dams to minimize the discharge of sediments to the river.

These suggested remediation actions are broadly in accord with those discussed in the auditreport.

Costs of remediation

Unfortunately, the audit does not provide information regarding the engineering requirements orthe costs of remediation measures. Many of the actions are potentially interconnected, with thetailings dam as a focal point for water quality control measures, for example. Relativelystraightforward engineering estimates could be prepared for the major items.

Calculating the marginal costs of the different potential actions involves estimating the quantitiesof metals removed from the system (either as annual load or as potential load) for each action andcalculating the cost per quantity of pollution avoided. An outline of how a marginal cost curve iscalculated (using imaginary cost information) is shown below.

12 Tierra audit, Appendix IV.


For this example, the reduction in the annual dissolved loads of cadmium is the measure ofenvironmental improvement.

I. The Pila tailings heap has a volume of 1.086 million cubic meters and is estimated todischarge about 320 kilograms per annum of dissolved cadmium. (There is no detailedinformation of the composition of the tailings, but if the tailings contained, say 0.01percent cadmium, then the quantity of cadmium in the dump would be close to 300,000kilograms.) Assume that the costs of remediation have been estimated as follows:

a) Cap site and divert drainage, which reduces discharges to 100 kilogram per annum.Cost: US$50,000.

b) In addition to (a), construct trench to intercept subsurface water, reducing dischargeto 50 kilogram per annum. Additional cost: US$30,000.

c) In addition to (b), collect and treat the drainage from the sealed dump, reducing thedischarge of cadmium to 5 kilograms per annum. at a cost of another US$50,000.

I. Another source of cadmium is the concentrator tailings spillage which is estimated tocontribute about 600 kilograms per annum of cadmium. To reduce flows from thissource would require a mixture of operational improvements, increased power suppliesand new equipment. Assume the cost is US$250,000 and that these actions reducecadmium flows by 300 kilograms per annum.

II. Dumps and river bed sediments along the river below the concentrator contribute aboutanother 600 kilograms per annum of metal. There will be a number of different site andremedial options which could be examined. Assume the following would be typical:

c) Cap some dumps and divert surface water which reduces discharge by 150kilograms per annum. Cost: US$50,000.

d) Divert river in lined channels around major areas of sediment which reduces thepollution load by 300 kilograms per annum. Cost is US$500,000. This will disturbthe sediments causing the release of metals in the short-run, but will isolate one ofthe major sources of metals in the long-run.

Table A4. 1 shows the marginal, total, and unit costs for the measures described here. This tablecould be expanded by including other measures which reduce cadmium. The table could alsoinclude calculations for other nearby mines to obtain regional marginal costs for removal ofcadmium from the system.

Calculating a Marginal Cost Curve 59

As a general rule, decision makers should choose investments which reduce a kilogram ofcadmium for the least amount of money. In this example, action L.a (cap site and divert surfacewater), which removes cadmium at the cost of US$250 per kilogram, is the most cost-effective.By contrast, the least cost-effective action would be III.b (divert river in lined channels), whichreduces cadmium at a cost of US$1,667 per kilogram.

Table A4.1 Costs and quantities of cadmium reduction: Example

Quantity of Cost Unit cost Kilograms Cumulative Cumulative cost Average costmetal reduced (USs) (per per US$ metal reduced (US$) per kilogram

(kilogram kilogram)per year)

la 220 50,000 227 4.0 200 50,000 250

lb 50 30,000 600 1.7 250 80,000 320

Ic 45 50,000 1,111 0.9 295 130,000 440

II 300 250,000 833 1.2 695 380,000 547

IlIa 150 50,000 333 3.0 845 430,000 508

Illb 300 500,000 1,667 0.6 1,145 930,000 812

Finding the least-cost measures does not provide guidance as to how much cadmium should beremoved, only the actions to pursue first. The target quantities to be removed depend on thebenefits that will be achieved from cadmium removal. Investments in reducing cadmium shouldbe made until the point where marginal benefits equal marginal costs, so it is also necessary tocompute the marginal benefits of the investments.

Figure A4.1 Cost per kilogram of cadmium removed

1800

1600 -__ _ __ __

> 1400 - __ _ _ _ _ _

1200 -

2 1000 _____

o 800 __ _ _

i. 600 --

4 400- ___ - -

200 - _

la lb I Illa Illb

Action

Annex 5

Inventory of Mines and Smelters in Bolivia,Relative Ranking of Mines by Hazard Potential,

and Individual Mine Hazard Scores

This annex contains an inventory of mines and smelters in Bolivia with information on theirlocation, years of operation, capacity, facilities, distance from nearest town, nearby rivers, andwhether or not an audit has been carried out. Data are from the February 1995 draft of theInventory of Mining Sites.

The annex also contains a summary table ranking the mines by hazard potential. And it containsdetailed hazard scoring spreadsheets for individual COMIBOL mines for which sufficient dataexists to make judgments on appropriate scores.

60

Table A5.1 Inventory of mines and smelters in BoliviaSite Type Depart- Years Capacity Facilities Town Kms to River Audit Comments

ment (tons per nearest fundingyear) townb agency

Bolivar Tin/lead/zinc Oruro 1980 - Antequera 5? Antequera Now in joint venturemine with COMSUR

Caracoles La Paz World Bank

Catavi Processing Potosi 1800? - Conc Llallagua Chayanta/Mamore Bilateral Serves Siglo XX

Chocaya Bilateral

Chorolque

Colavi

ColquechacaColquiri Tin/zinc mine Oruro 1850- 300,000 Conc Caracollo 40 Colquiri/Beni COMIBOL Audit completed

CorocoroEMO Tin smelter Oruro 1960?-1980? Smelter Oruro 0 n.a. World Bank

Fund. CataviHuanuni Tin mine Oruro 1??? - 300,000 Conc Machacamarca 30? Huanuni COMIBOL Large coop operations

Japo ?/Lake Poop6

KaminLa Palca Tin smelter Potosi 1982-1984 120,000 Smelter Potosf 15 Rivera/Pilcomayo World Bank

Machacamarca Smelter ? Oruro - 1985? Smelter Machacamarca 2? Lake Poop6 Bilateral

Matilde

MorococalaMutun Iron mine Santa - 1985? Smelter? ? Paraguay World Bank

CruzPIO Workshops Oruro 1950? - n.a. Oruro 0 n.a. World Bank

PI. Telamayu Smelter Potosi 1972-1980 600 Smelter Tupiza 30? Tupiza/Pilcomayo Bilateral

PI. PulacayoPlahipo Silver leach Potosi 1980?-1990? 120,000 Leach Potosi 2? Rivera/Pilcomayo World Bank

Poop6 Lake Poop6 Bilateral

Porco Zinc/Silver mine Potosi 1650 - 100,000 Conc? Potosi 5? Tacara/Pilcomayo Rented to COMSUR

Pulacayo

Rio YuraSan Jose Silver/lead mine Oruro 1650 - 1991 120,000 Conc Oruro 0 Lake Uru Uru Bilateral Major impacts in city

San Vincente Mine ? Potosi Tupiza? World Bank

Santa Fe Lead/silver/tin Oruro Payrumani? 10? Santa Fe/Huanuni Bilateralmine

Siglo XX Tin/zinc mine Oruro 1800? - Conc Llallagua Chayanta/Mamore World Bank Large coop operations

Tasna Mine? Potosi World Bank

Tatasi Bilateral

TelamayuUnificada Silver/tin mine Potosi 1545 - 1993 100,000 Conc Potosf 0 Rivera/Pilcomayo Bilateral Many small mines

Viloco _ .

Vinto Tin smelter Oruro 1972- 20,000 Smelter Oruro 8 n.a. ?? _

? means unknown, estimate; n.a. means not available.a/ Facilities or, site. .b/ Distance from nearest town likely to be affected by pollution.


Applying the hazard ranking process to nine sites using information available in the February1995 draft of the Inventory of Mining Sites produces the following list of mines ranked inaccordance with their potential to be causing damage to human health or the environment.'3 Theresults are tentative because of the lack of even basiic information for a number of the sites.Nevertheless, the results are reasonable according to experts in mining and the environment inBolivia.

Table A5.2 Relative ranking of mines by their hazard potential

Site Score

Javiar 64Estrella 62Venus 39Santa Fe 34Tierra 23Marte smelter 14Luna 15Jupiter 3Castillo 2

13 The names of the mines on this list have been changed to protect their identity. They do not thereforematch those in the Inventory of Mining Sites (Table AS. 1).

Table A5.3 Mine hazard scoring worksheet: Luna

Mine name

Luna

1 2 3 4 5 6 7 8 9


ofproblem exposed ranking materials, ranking ecosystems hazardbuildings, ranking

Hazard etc.


Lead 9 2 9 2 3 3 243

Mercury 9 2 9 2 3 4 0

Arsenic I 2 8 2 3 2 198

Cadmium 2 7 2 3 207

Zinc 2 9 2 22 l80

Silver 1 9 2 2 3 2 90

Acid generation 2 | 0 2 3 3 234

Cyanide O 9 2 2 2 3 3 O

Physical hazards 2 2 9 2 3 324

SITE TOTAL 2 bl ei

a/ Very likely = 2; possible in small quantitiles = 1; Not likely =0.

Table A5.4 Mine hazard scoring worksheet: Javiar

Mine name

Javiar

1 2 3 4 5 6 7 8 9


of problem exposed ranking materials, ranking ecosystems hazardbuildings, ranking

Hazard etc


Lead 9 9 9 3 1,800

Mercury 0 9 9 9 4 0

Arsenic I to 9 9 3 2 780

Cadmium I to 9 7 9 3 3 720

Zinc 2 10 9 2 9 3 2 480

Silver 2 10 2 9 3 2 480


Cyanide 0 1r0 9 2_

Physical hazards 2 10 9 9 9 3 1,620

SITE TOTAL 6,420

a! Very likely = 2; possible in small quantities = 1; Not likely =0.

Table A5.5 Mine hazard scoring worksheet: Estrella

Mine name

Estrella

1 2 3 4 5 6 7 8 9Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Rowexist?a and extent persons hazard damage to hazard of exposed mental score

ofproblem exposed ranking materials, ranking ecosystems hazardbuildings, rankingl

Hazard e


Lead 10 7 _75 3

Mercury 0 10 9 9 7 5 4 0

Arsenic 10 8 7 _ 2 820

Cadmium I 10 9 7 7 5 3 780

Zinc 2 10 9 2 2 560

Silver 2 10 9 2 2 560


Cyanide I 10 9 2 7 5 3 330

Physical hazards 2 10 9 9 7 1,620

SITE TOTAL 6,210

a! Very likely = 2; possible in small quantities = 1; Not likely =0.

ON

Table A5.6 Mine hazard scoring worksheet: Jupiter

Mine name

Jupiter

1 2 3 4 5 6 7 8 9Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Row scoreexist?a and extent persons hazard damage to hazard of exposed mental


Hazard e


Lead O 2 9 3 3 0

Mercury 5 2 3 3 4 0

Arsenic 1 5 2 8 3 2 110

Cadmium 1 5 2 7 3 3 115

Zinc 2 5 2 2 3 3 2 100

Silver O 5 2 2 3 3 2 |

Acid generation O 5 2 O 3 2 3 3 O

Cyanide O 5 2 2 3 3 |

Physical hazards 3 5 2 9 3 °

SITE TOTAL 325

a/ Very likely = 2; possible in small quantities = 1; Not likely =0.

Table A5.7 Mine hazard scoring worksheet: Venus

Mine name

Venus

1 2 3 4 5 6 7 8 9

Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Row scoreexist?a and extent persons hazard damage to hazard of exposed mental

ofproblem exposed ranking materials, ranking ecosystems hazardbuildings, rankingl

Hazard etc.

Chemical or metal hazards El"

Lead I 10 6 9 5 3 690

Mercury 0 10 6 9 5 4 0

Arsenic I 10 6 8 5 2 580

Cadmium I 10 6 7 1 5 3 570

Zinc 2 10 6 2 1 5 2 440

Silver I 10 6 2 1 5 2 220

Acid generation 2 10 6 0 1 2 5 3 340

Cyanide 0 10 6 2 1 5 3 0

Physical hazards 6 9 . 1,080

SITE TOTAL 3,920


00

Table A5.8 Mine hazard scoring worksheet: Marte smelter

Mine name

Marte smelter

1 2 3 4 5 6 7 8 9Likely to Severity Number of Health Extent of Materials Sensitivity Environ- Row scoreexist?a and extent persons hazard damage to hazard of exposed mental


Hazard et

Chemical or metal hazards 11 _

Lead 6 5 9 4

Mercury 6 5 9 4 4 O

Arsenic I 6 5 8 4 2 288

Cadmium 2 6 5 7 4 3 564

Zinc 2 6 5 2 4 4 2 216

Silver O 6 5 2 4 4 2 O

Acid generation 0 6 5 0 4 2 4 3 O

Cyanide 0 6 5 2 4 4 3 O

Physical hazards 0 6 5 9 4 4 0

SITE TOTAL 1,410


Annex 6

Site Specific Recommendations for FurtherInvestigation for Environmental Improvement

Table A6.1 Recommendations for further investigation: Sol

Recommended lnvestments |Benefits

Responsibility of the Secretariat of Mines

Seal playgrounds and other play areas that have been Reduce incidence of brain damage and other healthbuilt on mine material. damage due to exposure to lead and other heavy

metals and metalloids.

Remediate physical threats from abandoned mining Reduce risk of accidental injury and death.operations.

Channel and treat acid rock drainage. Lengthen the lifetime of underground pipes, reducethe flow of contamination to both Lake Crist6bal andthe region's aquifers.

Move the Domingo dump, shape the old site, and Reduce damage to human health, infrastructure,construct ditches to collect acid rock drainage. aquifers, and Lake Crist6bal. Free land for urban

development.

Provide education and technical assistance to Improve decisionmaking for environmentaldevelop capacity for environmental monitoring and management, leading to more efficient use ofthe development of new and ongoing mining resources.activities.

Responsibility of the municipality

Repair or replace pipe delivering drinking water to Improve quality and quantity of drinking water,the city. - reducing the incidence of waterbome diseases.

Control dust from urban roads built with mine waste Reduce the number of respiratory diseases androck. diseases caused by exposure to lead and arsenic.

69


Table A6.2 Recommendations for further investigation: Luna

Recommended Investments -TBenefitsResponsibility of the Secretariat of Mines

Activities to remove impediments to private Increase value of property.investment.






Repair or replace pipe delivering drinking water to Improve quality and quantity of drinking water,the city. reducing the incidence of waterborne diseases.


Construct a sewage collection system. Reduce incidence of waterbome diseases and increaseamenity values associated wit living in a cleanerenvironment.

Responsibility of new mine operator or COMIBOL

Ventilate the mine. Reduce the incidence of silicosis and lung cancer.

Site Specific Recommendations for Further Investigation for Environment Improvement 71

Table A6.3 Recommendations for further investigation: Tierra

Recommended Investments Benefits

Responsibility of the Secretariat of Mines

Activities to remove impediments to private Increase value of property.investment.




Stabilize the San Marco tailings dam. Reduce risk of accidental injury, death, ar.d propertydestruction from a landslide.


Identify the sources and pathways for mercury Reduce the incidence of mercury poisoning andcontamination. ecosystem damage.


Repair or replace pipe delivering drinking water to Improve quality and quantity of drinking water,the city. reducing the incidence of waterbome diseases.


:: g

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1995. "Environmental Audit of the Javiar Mine." La Paz, Bolivia.

1995. "Environmental Audit of the Luna Mine." La Paz, Bolivia.

Hutchinson, T., and K. Meema, eds. 1987. Lead, Mercury, Cadmium and Arsenic in theEnvironment, New York: John Wiley and Sons.

Johnson, P. and D. Rounds. 1994. "Risk-Based Corrective Action at Petroleum Release Sites."American Society for Testing and Materials News (May).

Ministerio de Desarrollo Sostenible Y Medio Ambiente, Secretaria Nacional de Mineria,Swedish Geological AB. 1995. "The Sol Pilot Project: Interim Report (March 1994-May1995)." La Paz, Bolivia.

Ostro, Bart. 1992. "The Health Effects of Air Pollutants: A Methodology with Applications toJakarta." World Bank, Policy Research Department, Public Economics Division,Washington, D.C.

73


1994. "Estimating the Health Effects of Air Pollutants." Working Paper 1301.World Bank, Policy Research Department, Public Economics Division, Washington, D.C.

United States Agency for International Development. 1990. "Ranking Environmental HealthRisks in Bangkok, Thailand." Working Paper. Office of Housing and Urban Programs.

United States Department of Interior, Bureau of Mines. 1994. "Abandoned Mine Inventory andHazard Evaluation Handbook," May, Washington, D.C.

United States Environmental Protection Agency. 1985. "Costs and Benefits of Reducing Leadin Gasoline: Final Regulatory Analysis." Office of Policy, Planning and Evaluation,Economic Analysis Division, Washington, D.C.

United States National Academy of Sciences. 1983. Risk Assessment in the FederalGovernment. Washington, D.C.: National Academy of Sciences.

1994. Science and Judgment in Risk Assessment. Washington, D.C.: NationalAcademy of Sciences.

Viessman Jr., W. and M. Hammer. 1985. Water Supply and Pollution Control, 4th edition.New York: Harper and Row.

Wildavsky, Aaron. 1995. But Is It True? Cambridge, MA: Harvard University Press.

World Bank. 1993. World Development Report 1993: Investing in Health. New York: OxfordUniversity Press.

1997. World Development Report 1997: The State in a Changing World. NewYork: Oxford University Press.

World Health Organization, Regional Office for Europe. 1987. Air Quality Guidelines forEurope. Copenhagen.

Workbook

Selecting Highest Priority Activities and Investments forEnvironmental Management in Mining Areas of Bolivia

This workbook outlines the steps and defines the data needed to carry out cost-benefit analysesfor investments and actions to reduce damage from environmental degradation. The approach isillustrated with examples for a variety of problems and investment options.

The workbook covers the types of problems most likely to be found in the mining communitiesof Bolivia. However the approach can easily be adapted to evaluate investments and actions forenvironmental protection in communities with different types of issues. Sources for tables andfigures, unless otherwise noted, are the authors' calculations.

75

Workbook Contents

1 INTRODUCTION ............................................... 79Pollutants Hazardous to Human Health ............................................... 79Pollutants Damaging to Infrastructure and Ecosystems ............................................... 79

2 CALCULATING THE BENEFITS AND COSTS OF REMEDIATINGPHYSICAL THREATS LEFT BY OLD MINE OPERATIONS .81

Benefits ... 81Costs. 8 1

3 DESIGNING A PROGRAM FOR REDUCING HEALTH DAMAGE FROMEXPOSURE TO LEAD .82

Steps Required .82Benefit-Cost Analysis: Calculating the Present Value of Actions to ReduceExposure to Lead .87

4 DESIGNING A PROGRAM FOR REDUCING HEALTH DAMAGE FROMEXPOSURE TO ARSENIC .............................................................. 99

Steps Required ............................................................. 99

5 DESIGNING A PROGRAM FOR REDUCING DAMAGE TOINFRASTRUCTURE AND ECOSYSTEMS DUE TO ACIDROCK DRAINAGE .............................................................. 102

Steps Required to Design a Program to Reduce Acid Generation ................................ 102Benefit-Cost Analysis: Calculating the Present Value of Actions to Reduce Damageto Infrastructure and Ecosystems ............................................................. 103

6 REMEDIATING MINE SITES TO ATTRACT PRIVATE INVESTMENT ......... 107

7 FINANCIAL INCENTIVES FOR CLEANING UP THE ENVIRONMENTWHILE REMINING OLD TAILINGS AND WASTE ROCK .... 108

77


Workbook Tables

W. 1 Major threats due to hard-rock mining in Western Bolivia ........................................ 80W.2 Pathways of exposure with critical and background levels: Lead ............................... 82W.3 Sources of lead exposure ........................................................ 83W.4 Data needed to develop a program to reduce health damage from lead ...................... 84W.5 Possible actions for reducing exposure to lead in Sol .................................................. 85W.6 Estimating the benefits of reducing blood lead levels in children ............................... 89W.7 Estimating the benefits of reducing blood lead levels in children in Sol

by 20 micrograms per deciliter ........................................................ 90W.8 Estimating the benefits of reducing blood lead levels in adult males .......................... 94W.9 Annual and present values of reducing soil lead exposure of adult males in Sol ........ 98W.l0 Pathways of exposure with critical and background levels: Arsenic ......................... 100W. 1 1 Data needed to develop a program to reduce exposure to arsenic ............................. 100W.12 Possible actions to reduce exposure to arsenic ........................................................ 101W.13 Possible actions for reducing acid rock drainage ....................................................... 102W. 14 Data required to estimate benefits of reducing acid rock drainage in Sol ................. 103W.15 Benefits of reduced maintenance and repair costs

and ecosystem protection in Sol ........................................................ 106

Workbook Figures

W. 1 Developing a cost-effective approach to reducing exposure to lead: Decision-tree .... 86

1 lutroduction

The threats to human health from mining include physical risks, such as falling into miningshafts, and diseases from exposure to heavy metals, metalloids, and chemicals. Accidents are themost common cause of health damage at mining sites around the world. Preventing accidents isalso relatively inexpensive to achieve, involving closing unused adits, removing machinery andexplosives, filling holes, and stabilizing tailings piles. Thus a program to reduce accidentsshould be the first task in remediating mine sites where the objective is to protect human healthfrom hazards due to mining.

POLLUTANTS HAZARDOUS TO HUMAN HEALTH

The pollutants from mining that are most likely to be damaging health in Western Bolivia arelead, arsenic and cadmium. Lead is the most hazardous of these pollutants: there is considerableevidence that shows lead causes brain damage in children and cardiovascular and other diseasesin adults, even at low doses. The relationship between exposure to lead and health damage hasbeen summarized in dose-response functions which makes it possible to quantify the benefits ofreducing lead exposure. The evidence for arsenic and particularly for cadmium is much lessclear.

A program to remediate mine waste whose objective is to protect human health should thereforebe concerned first with reducing exposure to lead, and then on reducing exposure to other heavymetals and metalloids such as arsenic and cadmium. A program to reduce exposure to leadwould also be likely to reduce exposure to arsenic and cadmium.

POLLUTANTS DAMAGING TO INFRASTRUCTURE AND ECOSYSTEMS

Contamination from mining also damages infrastructure and ecosystems. Acid rock drainagecorrodes underground piping and weakens building foundations. Acid rock drainage and heavymetals damage aquatic ecosystems; heavy metals may bioaccumulate in fish flesh and in plantsexposing organisms throughout the food-chain to toxins.

This workbook outlines the steps and defines the data required for designing programs to reducedamage to human health, economic infrastructure, and the environment from past miningactivities in Western Bolivia. The workbook provides examples of how to apply benefit-costanalysis to evaluate particular actions for reducing damage, once the data have been collected.The numbers used in the examples are fictitious, and are intended merely to illustrate theapproach. The workbook covers the hazards most likely to be found in mining communities inWestern Bolivia: physical hazards, lead, arsenic, and acid rock drainage. The workbook does notdiscuss mercury, since this element is not widespread in these areas. Mercury is highly toxic tohumans and to ecosystems, and should be addressed where it is found.

79


Table W.1 below lists the major threats to human health, infrastructure, and ecosystems inmining communities in Western Bolivia in order of importance.

Table W.1 Major threats due to hard-rock mining in Western Bolivia

HUMAN HEALTH

Physical hazardsAccidents

Heavy metals and chemicalsLeadArsenicCadmium

INFRASTRUCTURE AND MATERIALS

Acid generation

ECOSYSTEMS

LeadCadmiumAcid generationArsenic

2 Calculating the Benefits and Costs of RemediatingPhysical Threats Left by Old Mine Operations

In many Bolivian mining centers, abandoned mining operations pose a considerable risk ofinjury or accidental death to those living or working nearby. The hazards may include mineopenings such as shafts and adits, unstable ground, unsecured tailings or waste rock piles,abandoned explosives or electrical or mechanical equipment, dilapidated buildings, and tramcables. In the United States the leading cause of injury or death at abandoned mine sites is byfalling into mine openings.'4

BENEFITS

The benefits of addressing these risks would be a reduced likelihood of injury or accidentaldeath. The benefits would be valued as the willingness to pay to reduce this risk. Unfortunatelythere are no data regarding the amount Bolivians would be willing to pay to improve safety. Inthe United States hedonic wage and contingent valuation studies have found that individuals arewilling to pay between US$2-7 each to reduce the risk of death by one in one million."5Aggregated over a large population, this amounts to between US$2-7 million per death avoided.This death avoided is also called a "statistical life." Taking the lower bound, US$2 million, andadjusting this to reflect differences in per capita incomes between the United States and Bolivia,"6gives a figure of about US$59,350 as a plausible minimum Bolivians would be willing to pay tosave a statistical life.'7

COSTS

A program to assess and remediate physical hazards from old mining operations in Boliviawould likely cost less than US$100,000 for each mining center. This activity would be worthdoing if it would be expected to save two statistical lives. The activity would generate thehighest benefits on mining sites with large populations exposed to the risks, such as Sol.

14 United States Department of Interior, Bureau of Mines, Abandoned Mine Inventory and Hazard EvaluationHandbook, May 1994.Is fHedonic wage studies derive estimates of what people are willing to pay for safety by comparing wagerates for two jobs that are identical in all respects except for the risk of accidental death. Contingent valuationstudies use surveys and questionnaires to ask people directly what they would be willing to pay for non-marketgoods, such as safety or environmental services.16 Recent data show per capita income in the United States to be US$26,980 and in Bolivia to be US$800.Therefore, United States values have been divided by 33.7 to estimate Bolivian values (World Bank, 1997.)17 Of course this value will grow as incomes grow.

8I

3 Designing a Program for Reducing HealthDamage from Exposure to Lead

STEPS REQUIRED

Collect data on blood-lead levels

The first step in developing a program to reduce health damage from lead-exposure is to collectdata on blood-lead levels to ascertain whether lead-exposure is a problem in the community.Blood-lead levels above 10 micrograms per deciliter in children indicate that exposure is highenough to be causing health damage (in regions of the United States with few sources of leadcontamination, blood-lead levels average 5 micrograms per deciliter in children and adults).

Identify the pathways of exposure

Exposure to lead comes from ingesting food, soil and dust, from drinking water or frombreathing air. Table W.2 lists the pathways of exposure for lead. Table W.2 also shows levels ofcontamination critical for human health. These are levels at which persons exposed tocontaminated food, soil, water, or air will likely experience elevated blood-lead levels, withconsequent health damage. The numbers in the table are intended as guides to assist inidentifying the major pathways of lead exposure, and possible areas for remediation.

Table W.2 Pathways of exposure with critical and background levels: Lead

Drinking water Air Soil Crops Fish

critical background critical background critical background critical background critical background

Lead 50 l.g/l <20 gg/1 2 Zsg/m3 0.00005 1,000 ig/g 16 g±g/g n.a. n.a. n.a. n.a.Ig/ m' dry weight dry weight

Note: Critical levels are levels considered potentially dangerous to human health. The figures are from World Health Organization RegionalOffice for Europe 1987; Hutchinson and Meema 1987; jig is microgram; I is liter; g is gram; n.a. is not available.

Identify the major sources of lead contamination and estimate the relative contribution ofeach to elevated blood-lead levels

Major sources of lead in the environment are vehicles using leaded-gasoline, smelters, lead paint,road-dust, batteries, food storage cans, and lead-glazed pottery (see Table W.3). As far aspossible, analysts should estimate the relative importance of each source to elevated blood-lead

82

Workbook 83

levels. A program to reduce health damage from lead should consider first the feasibility andcosts of controlling lead from the most important sources.

Table W.3 Sources of lead exposure

Very important Moderately important Unimportant

Leaded gasoline

Emissions from smelters

Dust from roads

Dust from tailings piles

Drinking water (may becontaminated at the source, orthrough leaching from lead pipes).

Lead paint

Lead-glazed pottery

Food storage cans

Toys and pencils

Battery repair shops

Others

Data needs

To estimate the relative importance of the various pathways and sources requires data on leadlevels in air, soil, dust, drinking water and food. Data are also needed on the sources of lead inthe home environment, such as pottery, paint and pencils. Variations in blood-lead levels byneighborhood or district can provide clues to major sources of exposure. For example, if blood-lead levels are particularly high among children attending a particular school, the source may bethe school environment and involve lead paint or contaminated soil.


Table W.4 Data needed to develop a program to reduce health damage from lead

Data required Collection method

Blood lead levels. Blood sampling.

Levels of lead in drinking water, air, soil, crops, Environmental sampling.and fish.

Sources of lead in the home environment. Sampling of dust in the home; surveys to determine ifobjects containing lead are being used in the home.

Sources of lead contamination. Variations in blood lead levels by residential orschool district may give clues to major sources ofexposure. Information about emissions to air fromvehicles or smelters or discharges to water from oreprocessing facilities may help identify sources.

Identify actions for reducing exposure

There are many potential actions for reducing exposure to lead. The lowest-cost actionsgenerally involve changes of behavior, such as washing hands and living areas, installing andusing window coverings, and avoiding pottery and toys containing lead. The effectiveness ofthese measures depends on the willingness of the community members to participate.Remediating mine waste would prevent lead exposure from mining sources without requiringchanges in behavior but would cost considerably more. See Table W.5 for actions that reducehealth damage from lead exposure.

Workbook 85

Table W.5 Possible actions for reducing exposure to lead in Sol

Action Cost Comments

Mine waste remediation

Pave or seal Medium Would reduce a major source of exposure to children under age 7, the most vulnerableplaygrounds group to lead poisoning. Would also reduce exposure to arsenic, cadmium, and copper

of children.

Pave in-town roads TBD Would control a major source of airbome lead, and provide other benefits such aslower transportation costs and amenity benefits.

Move or cap Medium Would reduce exposure to cadmium, arsenic, and copper in addition to lead. WouldDomingo dump provide benefits to infrastructure and ecosystems in addition to human health.

Other actions

Encourage hand Low Effectiveness depends on the willingness of the family to accept this approach, and onwashing the availability of clean water.

Install window Low Effectiveness depends on participation of the family.coverings in homes

Fence off Low Effectiveness depends on willingness of inhabitants to obey prohibitions.contaminated areas

Teach people to Low Effectiveness depends on participation.avoid leaded cans

Encourage people to Low Effectiveness depends on participation.use lead-free pottery

Remediate lead paint Medium May make problem worse in the short-run. House to house remediation can beexpensive.

Encourage the use of Low Effectiveness depends on participation.lead-free toys

TBD is to be determined

Ranking actions in terms of benefits and costs

The final step to developing a program to reduce health damage from lead is to analyze each ofthe likely actions in terms of its benefits and costs using the benefit-cost framework for reducingexposure to lead outlined below. The preferred actions are those which provide the largestbenefits for the resources expended. The steps are outlined in the decision-tree below.


Figure W.1 Developing a cost-effective approach to reducing exposure to lead: Decisiontree

No a No need to address leadcontamination

Are blood lead levelsof children and adultsabove 10 microgramsper deciliter?

Yes Identify major pathways(see Table W.2)

Identify actions for Develop cost-effectivereducing exposure, program for reducingestimate relative costs exposure to lead, by(see Table W.5) comparing the benefits

and costs of each action(see benefit-costworksheets)

Identify major sources andestimate the relativecontribution of each toelevated blood-lead levels

(see Table W.3)

W7orkhook 87

BENEFIT-COST ANALYSIS: CALCULATING THE PRESENT VALUE OF ACTIONSTO REDUCE EXPOSURE TO LEAD

Paving or sealing playgrounds built with mine tailings to reduce exposure by children tolead

Lead is very damaging to human health. Children exposed to even low doses of lead mav suffersubtle brain damage and learning disorders, including lower lQs, impaired attention, speech andlanguage deficits, and behavior problems. These effects may persist throughout a person slifetime, with long-term effects on educational attainment, employability, and ability to copewith the stresses of life. Adult males exposed to lead are more likely to suffer hypertension.nonfatal heart-attacks, and early death. Acute exposures can cause colic, shock, severe anemia,acute nervousness, kidney damage, irreversible brain damage and even death. Women of child-bearing age are at special risk, as the potential for harmful impacts on fetal development issignificant. This problem is of special concern for women working in lead industries. such aslead smelters.

The most important indicator of lead exposure for human beings is the amount of lead in theblood. There is increasing evidence that health damage begins to occur when lead in the bloodexceeds 10 micrograms of lead per deciliter of blood. In the United States and other countrieswhere lead in gasoline, paint, water pipes, and pottery has been substantially reduced oreliminated, blood lead levels among children average 4-6 micrograms per deciliter. In countriesthat have not yet taken these steps, blood lead levels can easily average 25 micrograms perdeciliter and exceed 40 micrograms per deciliter in some cases.

Studies in the United States and elsewhere have associated an one microgram per deciliterincrease in blood lead with a .25 point decline in IQ. In the United States, studies have estimatedthat each IQ point is worth a present value of about US$5,550 in lifetime earnings." Convertingthis to reflect the difference in earnings between the United States and Bolivia gives a presentvalue of US$165 per IQ point in Bolivia.

Soil and house dust are important sources of exposure to lead, especially among those youngenough to be playing on the ground, mouthing toys and other objects. and licking dirty hands.Soil lead levels above 1,000 micrograms per gram dry weight are considered critical, and likelyto be damaging human health.

At present there are no data regarding either blood lead levels or the level of lead in playgroundsoils in the mining communities of Bolivia. However, the approach for calculating benefits ofpaving playgrounds (or another activity) can be demonstrated using plausible assumptions, asfollows:

Is This estimate is from the United States Environmental Protection Agency.


a) Blood lead levels are 25 micrograms per deciliter compared with 5 micrograms perdeciliter for the United States (it is assumed that man-made sources of lead in theenvironment contribute 20 micrograms of lead per deciliter of blood in Bolivia).

b) Exposure to soil lead contributes 30 percent of the total elevated blood lead levels (othersources of lead include leaded gasoline, pottery, lead in water, etc.). Thus eliminatingthis source of exposure would reduce blood lead levels by 6 micrograms per deciliter(20 x .30 = 6).

c) The number of children age 7 in Sol (the population most at risk are children age 7 andbelow) is about 2,700. Each child suffers a permanent loss of 1.5 IQ points as a result ofexposure to soil lead. For Sol, the total loss of IQ points for each cohort of 7-year olds isabout 4,050 (1.5 points x 2,700 children) per year.

d) The present value of each IQ point is about US$165. Thus the present value of the loss ofproductivity to each year's cohort of 7-year olds of Sol is about US$688,250.

e) A project to seal or pave playgrounds in Sol would last about ten years and prevent aboutUS$4.1 million (present value using a discount rate of 10 percent) in lost productivity. Aproject to prevent lead exposure from playgrounds that costs less than US$4.1 millionwould be worth doing.

This analysis probably underestimates the value of undertaking a program to seal or paveplaygrounds, since doing so would also reduce the exposure of children to arsenic, cadmium,zinc, and copper, which may also damage health.

Table W.6 shows the full approach in summary form, including data needs. Table W.7 providesan example using plausible assumptions.

Table W.6 Estimating the benefits of reducing blood lead levels in children

A 13 C ] D E F G | [ Pa/llm av's of Critical Contribution to total Calculating benefits oJ reducing blood lead levels

exposure levels blood lead

IPercent Contribution Reduction in IQ point IQ point Present Number Benefits of Benefits for tenin points. blood lead per pg/dl per child value per of reducing soil cohorts of

given initial due to action IQ point childrcn lead exposure remediatingblood lead (US$) age 7 for each cohort each pathway

of 7-year olds (presetnt value.US$)b

(A xX Xg/dl)a (C x D) (E x F x G)

Soil 1.000 lig/g 30 0.25 165

Watcr 50 pg/I 10 0.25 165

Air 2 pg/m3 40 0.25 165

Food n.a. 20 0.25 165

IQ point per 100ug/deciliter

pg is microgram: dl is deciliter: g is gram: m3 is cubic meter: n.a is not available.

a] Column A multiplied by current levels of blood lead, denoted by X.b/ Using a discount rate 10 percent.

00

Table W.7 Estimating the benefits of reducing blood lead levels in children in Sol by 20 micrograms per deciliter

A L3 C [) I" G (i 1 I

Pathwlavs of (Critical Contriblution to total Calcutlating benefits of reducing blood lead leve/se.xposure levels blood lead

Percent Contribution Reduction in IQ point IQ point Present Numbcr Benefits of Benefits for tenin points. blood lead per lg/dl per child value per of reducing soil cohorts of

gixen initial due to action IQ point children lead exposure remediatingblood lead (US$) age 7 for each cohort each pathway

of 7-year olds (present value.USS )b

(A x A ,Ig/dl)a ((C x D) (E x F x G)

Soil 1.000 pg/g 30 7.5 6 0.25 1.5 165 2,700 688,250 4,106,107

Water 50 pg/I 10 2.5 2 0.25 0.5 165 2,700 222,750 1,368,702

Air 2 pg/m3 40 10.0 8 0.25 2.0 165 2,700 891,000 5,474,809

Food na. 20 5.0 4 0.25 1.0 165 2,700 445,500 2,737,405

10 point per 100 25.0aig/deciliter

pg is microgram: dl is deciliter: g is gram; m3 is cubic meter; n.a is not available.

a! Column A multiplied by current levels of blood lead, denoted by X.b/ Using a discount rate 10 percent.Aote. These calculations are based on plausible assumilptions. Calculating the actual benefits requires data on blood lead levels and levels of lead in the soil.

Workhook 91

Remediating the Domingo waste rock dump

The Domingo waste rock dump is believed to be an important source of dust containing lead,arsenic, and cadmium in Sol, which may be damaging human health, and of acid rock drainage,which may be damaging urban infrastructure and contaminate the region's aquifers andenvironment. The dump has been used as a building site for urban dwellings, and is clearlyexposed in some unpaved streets and backyards, allowing inhabitants to come into direct contactwith the heavy metals and metalloids contained in this material.

Removing or sealing the dump would likely reduce the exposure of the population to heavymetals and metalloids through airborne dust or direct contact. In addition. remediating the wasterock dump would reduce the flow of acid waters which may be damaging the city's infrastructureand region's environment. Finally, the project would make land available in the center city forurban development. The benefits would be valued as (a) the benefits of reduced health damage,(b) the incremental increase in the lifetime of the drinking water and sewerage systems, (c)savings in operation and maintenance costs for water and sewerage systems, (d) savings inbuilding materials and repair costs, (e) the benefits of reducing damage to aquifers andecosystems, and (f) the added supply of urban land for development.

Reducing h7uminan health dam11age

Heavy metals and metalloids, such as lead, cadmium, and arsenic damage human health. Leadcauses hypertension, coronary diseases, and premature mortality among adult men in addition toits impact on children described in Section 1. Arsenic has been linked to a treatable form of skincancer, liver dysfunction, vascular disturbances and possibly lung cancer. Cadmium causes renaldysfunction.

Lead. Studies in the United States and elsewhere have associated an one microgram per deciliterincrease in blood lead with an increase of (a) 3,630 cases of hypertension per 100,000 males aged20-70. (b) 17 cases of nonfatal heart attacks per 100,000 men aged 40-59, and (c) 17.5premature deaths per 100,000 men aged 40-59.

At present there are no data regarding either blood leads or the amount of lead in the soil of theDomingo waste rock pile. However, it is possible to estimate benefits of reducing exposure tolead in soil by remediating the Domingo waste rock pile, using plausible assumptions. asfollows:

a) Blood lead levels are 20 micrograms per deciliter compared with 5 micrograms perdeciliter for the United States. Thus, it is assumed that blood levels can be reduced by 15micrograms per deciliter with environmental controls in Bolivia.


b) Exposure to lead in the waste rock pile contributes 30 percent of the total elevated bloodlead levels (other sources of lead include leaded gasoline, pottery, lead in water, etc.);thus eliminating this source of exposure would reduce blood lead levels by 4.5micrograms per deciliter (15 micrograms per deciliter x .30 = 4.5 micrograms perdeciliter).

c) The number of adult males ages 20-70 in Sol is about 22,800. The number of adultmales ages 40-59 is about 6,850.

d) In the United States, costs for medical care and lost work time for hypertension areUS$450 and for nonfatal heart attacks are US$5,667. In 1990, medical expenditures percapita averaged US$2,763, while in Bolivia medical expenditures per capita averagedUS$25'9 (World Bank, 1993). If costs for hypertension and nonfatal heart attacksaccounted for the same proportion of total medical expenditures in Bolivia as in theUnited States (16.3 percent and 205 percent respectively), then each hypertension case inBolivia would be valued at about US$4.07, and each case of nonfatal heart attacks wouldbe valued at US$51.25. The value of preventing one premature death in Bolivia would beUS$59,350, as discussed above in the section on calculating the benefits and costs ofremediating physical threats left by old mining operations.

e) Thus the total annual benefits of reducing cases of hypertension in Sol would beUS$15,158 (.0363 cases per person per 1 microgram per deciliter x 4.5 micrograms perdeciliter decline in blood lead due to soil remediation x US$4.07 per case x 22,800males). The total annual benefits from reducing nonfatal heart attacks due to exposure tolead soil would be about US$268. The total annual benefits in Sol from preventing apremature death would be US$319,595.

The annual benefits of reducing diseases among adult males in Sol due to lead exposure fromcontaminated soil would thus be US$335,000. The total present value computed for a period of50 years would be about US$3.3 million, assuming a discount rate of 10 percent (Table W.9).These benefits would be addition to benefits to children, as described above.

Other heavy metals. There are no reliable dose-response functions available to relate humanexposure to arsenic or cadmium to health impacts, so benefits from reducing exposure to thesemetals cannot be quantified. However, a program to monitor the concentration of these metals inblood or urine could give an indication of whether exposure levels are high enough to causeconcern. Benefits from reducing exposure to arsenic and cadmium would be in addition to thosefrom reducing exposure to lead.

19) In 1990 medical expenditures accounted for 12 percent of United States' Gross Domestic Product and 4.5percent of Bolivia's Gross Domestic Product.

Workbook 93

Infrastructure and ecosystem benefits

The approach for estimating infrastructure (categories b, c, d of the benefits defined above), andecosystem benefits is described in chapter 5, below. Assuming that the Domingo waste rockdump is responsible for 10 percent of the total acid rock drainage seeping through the city andinto the environment, benefits from remediating this source would be valued at aboutUS$120,500 (present value).

Total benefits

Total quantifiable benefits for remediating the Domingo waste rock dump could thus be aboutUS$3.5 million. In addition, there would be nonquantifiable benefits to health from reducingexposure to arsenic, cadmium, and other heavy metals, and by making land available fordevelopment.

Summary of potential benefits of remediating the Domingo waste dump

Benefit category Present value (USS)

Reduced health damage due to exposure to leadHypertension 150,500Nonfatal heart attacks 2.500Premature mortality 3,200,000

Reduced health damage due to exposure to arsenic and cadmium n.a.

Reduced damage to infrastructure and ecosystems 120,500

Total 3,473,500

Table W.8a Estimating the benefits of reducing blood lead levels in adult males: Hypertension

A B C [D E F G H I

Pathways of Critical Contributioni to total blood Calculating benefits of reducing blood lead levelsexposure levels lead

Percent Contribution Reduction in Hyper-tension Reduction in Number of Reduction in Value per case Annual benefitsin points, blood lead to cases per cases due to adult males cases per (US$) of reducing

given initial 5 ptg/dl adult male age remediation of ages 20-70 in year in Sol hypertension perblood lead of 20-70 per 5 source per Sol per pathway pathway in Sol

20 ug/dl iig/dl per year 1,000 adult (US$)males

(A x X g/dl,)a (C x D) (E x F) (G x H)

Soil I .00O .g/g 30 6 4.5 0.0363 0.1634 22.800 3,724 4.07 15,158

Water 50 i-g/I 10 2 1.5 0.0363 0.0545 22,800 1,241 4.07 5.053

Air 2 sg/m3 40 8 6 0.0363 0.2178 22.800 4.966 4.07 20.211

Food nia. 20 4 3 0.0363 0,1089 22.800 2.483 4.07 10.105

IQ point per 100 20 15ag/deciliter

pjg is microgram: dl is deciliter: g is gram; m' is cubic meter; n.a is not available.

a/ Column A multiplied by total potential reduction in blood lead (in this example. 15 ptg/dl). denoted by X.

Table W.8b Estimating the benefits of reducing blood lead levels in adult males: Nonfatal heart attacks

J K L M N 0 P

Pathways ofexposure

Reduction in Nonfatal heart Reduction in cases Number of adult Reduction in cases per Value per case Annual benefits ofblood lead to 5 attacks cases per due to remediation of males in Sol ages year in Sol per (US$) reducing nonfatal heart

tLg/dl adult male ages 40- source per adult male 40-59 pathway attacks in Sol per59 per ig/dl pathway

(A x AX,&gldl)a (Jx K) (L x MI) (Alx 0)

Soil 4.5 0.00017 0.000765 6.838 5 51.28 268

Water 1.5 0.00017 0.000255 6.838 2 51.28 89

Air 6.0 0.00017 0.001020 6.838 7 51.28 358

Food 3.0 0.00017 0.000510 6.838 3 51.28 179

Total 15

p.g is microgram: dl is deciliter; g is gram; ml is cubic meter: n.a is not available.

a! Column A multiplied by total potential reduction in blood lead (in this example. 15 pg/dl). denoted by X.

Table W.8c Estimating the benefits of reducing blood lead levels in adult males: Premature deaths

Q R S T U V W

Pathways ofexposure

Reduction in Premature deaths per Reduction in cases Number of adult Reduction in cases per Value per case Annual benefits ofblood lead to 5 adult male ages 40-59 due to remediation of males in Sol ages year in Sol per (US$)b reducing premature

l.g/dl per pg/dl source per adult male 40-59 pathway mortality in Sol perpathway

(A x ug/dl)a (Qx R) (Sx T) (Ux V)

Soil 4.5 0.000175 0.000788 6.838 5 59.350 319,595

Water 1.5 0.000175 0.000263 6.838 2 59.350 106.532

Air 6.0 0.000175 0.001050 6.838 7 59.350 426.127

Food 3.0 0.000175 0.000525 6.838 4 59,350 213.064

Total 15

jag is microgram: dl is deciliter, g is gram; m' is cubic meter: n.a is not available.a/ Column A multiplied by total potential reduction in blood lead (in this example, 15 jag/dI), denoted by X.b/ The value of a statistical life as described in chapter 2.

Table W.8c Estimating the benefits of reducing blood lead levels in adult males: Summary

x

Annual total benefits of reducing exposure to lead by males per pathway (UJSS)

(I + P +W)

Soil 335,022

Water 111,674

Air 446,696

Food 223,348

'0

98 Selting Priorities for Environm7ental Management: Mining in Bolivia

Table W.9 Annual and present values of reducing soil lead exposure of adult males in Sol

(US$ present value, discount rate = 10 percent)

Aniual benief'its of reducing cases of Aninlual bcnefits of reducing Aninlual bcnelits ol' reducing inicidence ofhypertenlsionI cases of non-fatal heart attaicks premature imiortality

1998 15,158 268 319,595

1999 15,158 268 319,595

20(X) 15,158 268 319,595

20)1 15,158 268 319,595

2(0)2 15.158 268 319.595

2(X)3 15.158 268 319,595

2(X)4 15,158 268 319,595

2(X)5 15.158 268 319,595

20()6 15,158 268 319.595

2(X)7 15,158 268 319,595

2(X)8 15,158 268 319,595

2009 15,158 268 319.595

2010 15,158 268 319,595

2011 15,158 268 319,595

2012 15,158 268 319,595

2013 15,158 268 319,595

2014 15,158 268 319,595

2(015 15,158 268 319,595

20)1( 15.158 268 319,595

2017 15,158 268 319,595

2018 15,158 268 319,595

2019 15,158 268 319.595

2(020) 15.158 268 319.595

2021 15,158 268 319.595

2(022 15,158 268 319,595

2023 15,158 268 319,595

2024 15.158 268 319,595

2025 15,158 268 319,595

2026 15,158 268 319,595

2027 15,158 268 319,595

21028 15.158 268 319.595

20)29 15,158 268 319.595

20)30 15,158 268 319,595

2(031 15.158 268 319,595

2032 15,158 268 319,595

2(033 15,158 268 319,595

2(034 15,158 268 319,595

2035 15,158 268 319,595

2(036 15,158 268 319.595

2037 15,158 268 319,5952(038 15,158 268 319,595

2039 15,158 268 319,595

2040) 15,158 268 319,595

2041 15,158 268 319.595

2(042 15.158 268 319.595

2(043 15,158 268 319.5952()44 15,158 268 319.595

21)45 15,158 268 319,595

21146 15,158 268 319,595

2(147 15,158 268 319,5952(048 15,158 268 319,595

Present value 150,4(08 2,660 3,171,203

4 Designing a Program to Reducing HealthDamage from Exposure to Arsenic

STEPS REQUIRED

The steps required for designing a program to reduce health damage from arsenic are similar tothose for lead. However, the health impacts of arsenic exposure are much less well understoodthan for lead. There do not currently exist reliable dose-response functions which link exposuresto health damage as for lead. Thus, it is not possible to quantify benefits of reducing arsenicexposures at this time. It should be noted that arsenic is not known to damage human health atlevels likely to be found in the ambient environment of the mining region of Bolivia. except nearpoint sources such as smelters. Recent studies strongly suggest that no health damage occurswith arsenic exposure until persons are exposed to a threshold level. The lowest dose for whicharsenic effects of any kind have been found is about 100 micrograms per liter in drinking water(Wildavsky. 1995). The objective of a program to reduce exposure to arsenic would be to reducebody-burdens of arsenic at reasonable cost. A program which reduces exposure to lead wouldalso reduce exposure to arsenic, cadmium and other heavy metals, so joint benefits would begenerated with a lead-reduction program.

Collect data on arsenic in urine or hair

Information on levels of arsenic in urine or hair would indicate whether inhabitants are beingexposed to levels of arsenic high enough to cause concern.

Identify the pathways of exposure

Persons may be exposed to arsenic through drinking water, air, soil or dust, and food. In mostplaces, the most important pathway is drinking water: in regions with special geochemicalproperties, background levels of arsenic in surface or groundwater may be high enough todamage health, when this water is used for drinking. Air may be an important pathway nearsmelters. Children may receive significant exposure through ingesting contaminated soil anddust. Other pathways include crops grown on arsenic-contaminated soil, fish from arsenic-contaminated water, and airborne-dust from tailings piles and roads. Table W. 10 lists the keypathways and critical and background levels for arsenic.

99

100 Setling Priorities for Environmental Management. Mining in Bolivia

Table W.10 Pathways of exposure with critical and background levels: Arsenic

Drinking water Air SSol crops Fish

critical background critical backgrotind critical background critical background critical background

Arsenic 200 <10 Ot/gl 750 1-10 500 pg/g 40 sg/g 40 pg/g I 1.g/g n.a. n.a.jig/l fig/ml nig/ mi dry dry weight dry dry weight

Wciglht weiglht

pg is microgrami; I is liter: g is gram: ng is naniogramil: n a. is not available.

Noie: Critical levels are levels considered potentially dangerous to human health.

Souri-ce: World Health Orgailization Regionial Office for Europe 1987; Hutchinisoni and Meema 1987.

Identify the major sources and estimate the relative importance of each

Important sources of arsenic include smelters, mine waste, and natural sources. A program toreduce health damage from arsenic exposure should consider first the costs and feasibility ofreducing exposure from the most important sources.

Table W.11 Data needed to develop a program to reduce exposure to arsenic

Data required Collection method

Arsenic levels in urine or hair Urine or hair sampling

Arsenic levels in drinking water, air, soil, crops, and fish Environmental sampling

Sources of arsenic contamination Variations in arsenic levels in urine or hair levels byresidential or school district may give clues to majorsources of exposure. Information about emissions to airfrom smelters would be valuable.

Identify actions to reduce exposure

Actions for reducing arsenic exposure depend upon its source. If the major source is a smelter,emissions controls will be needed. If the key source is naturally-contaminated drinking water,the only way to reduce exposure would be to develop alternative supplies of drinking water. Ifarsenic-contaminated airborne dust is a major source, then remediating mine waste may help.Preferred actions are those which achieve the largest reduction in arsenic exposure for theavailable funds.

Workbook 101

Table W.12 Possible actions to reduce exposure to arsenic

Action Cost ('onments

Mine waste reniediation

Capping, sealiig, or revegetatinig Mcdium Would reduce a source of airborne arsenic. Would also reducc thc likelihoodtailings piles children ingest arsenic throughi soil or dust.

Pave in-towni roads TBD Would control a soLurce of airborne arsenic. along witl lead and cadmitim.

Channel and treat acid rock drainage Medium Would reduce the risk of arsenic contaminating drink-ig water supplics at thicsource. Would provide little immediate impact on water quality.

Reduce emissions from smelters Higih Older plants nay need expensive retrofitting. Some beniefits may be achievedby upgrading production technology.

Other actions

Encourage hanid washing Low Effectiveness depends on the willingniess of the family to accept thlis approach.and on the availability of clean water.

Install window coverings in homes Low Effectiveness depends on participation of the family.

Fence offcontaminated areas. Prohibit the Low Etfectiveness depends on williiginess of inhabitants to obey prohibitionlsgrowinig of crops on contaminated soils

TBD is to be determined.

101

5 Designing a Program to Reduce Damage to Infrastructureand Ecosystems Due to Acid Rock Drainage

STEPS REQUIRED

In many mining communities in Western Bolivia very low-pH waters (acid rock drainage)pumped from mines and percolating through tailings piles corrodes underground piping andbuilding foundations, and contaminates shallow aquifers and surface waters. Developing aprogram for reducing this damage requires (a) identifying the sources of acid rock drainage, (b)estimating the relative contribution of each source to the total load, and (c) calculating the costsand the benefits of remediating individual sources.

The environmental audits that have been completed for Sol, Luna, and Tierra have identifiedsources of acid rock drainage and their relative importance for those mine sites. This informationwill be collected for other mine sites as they undergo environmental audits.

Identify actions for reducing acid rock drainage

There are many actions for reducing acid rock drainage which vary in cost and efficacy, and havedifferent requirements for long-term operation and maintenance. Many of the actions areexperimental; knowledge is growing rapidly about which approaches work best in particularconditions. Table W. 13 contains a partial list of actions for reducing acid rock drainage.

Table W.13 Possible actions for reducing acid rock drainage

Action Cost Conmnents

Channel and treat drainage Medium to high depending on Often a cost-effective approach for reducing amouLit of acid rock drainagefrom mine treatment approach affecting iifrastructure and ecosystems, dependinlg on treatmenit methiod.

Plugging adits, flooding TBD Success of this approach depends on geology, the minie workings.mine interrelationships of surface and grouLidwater reghimes. Plugginig one adit stops

one controllable source, however the water may emerge elsewhere inunconitrollable seeps.

Revegetate tailings piles Mediumi Can be cost-ef'fective and part of a public works prqject. requires source oftopsoil; success depends on climatic variables suLci as raiifall, altitude,growing season, is possible to use land ibr maniy purposes if revegetated.

Cap tailings pile with low- Medium Can be problematic lor large covers.permeability dry cover

TBD is to be deterinied

102

Workhook 1 03

Data needs

Data are needed to estimate the benefits of reducing acid mine drainage and the costs ofparticular actions. Table W.14 shows the data needed to estimate the benefits of channeling andtreating acid rock drainage in Sol.

Table W.14 Data required to estimate benefits of reducing acid rock drainage in Sol

Recommended Investments Benefits

Expected savings from extending the lifetime of the Estimates from persons expert in appraising thewater delivery system. capital costs of water and sanitation systems.

Savings on operation and maintenance costs for Estinates from persons expert in appraising theunderground piping systems. operation and maintenance costs of water and

sanitation systems.

Savings on building material and repair costs. Estimates from persons expert in appraising the costsof building repairs.

The amount adults would be willing to pay each This data would be collected using contingentyear to avoid contamination of the deep aquifers. valuation survey techniques.

The amount adults would be willing to pay each This data would be collected using contingentyear to protect the ecosystem of Lake Crist6bal. valuation survey techniques.

BENEFIT-COST ANALYSIS: CALCULATING THE PRESENT VALUE OF ACTIONSTO REDUCE DAMAGE TO INFRASTRUCTURE AND ECOSYSTEMS

Channeling and treating acid rock drainage in Sol

In Sol, uncontrolled acid rock drainage pumped from the Javiar mine accounts for over 80percent of the acid water released into the environment in the city. Low-pH water, can corrodeunderground piping, and weaken building foundations constructed of carbonate material. Acidwaters for the mine may also be responsible for some contamination of the region's shallowaquifers and the Lake Crist6bal ecosystem. Channeling and treating the acid rock drainage -

which has an average pH of about 2 - would likely reduce this damage. The benefits would bebased on (a) the incremental increase in the lifetime of the drinking water and sewerage systems,(b) a reduction in building repair costs, (c) willingness to pay to reduce the risk of contaminationof deep aquifers, (d) willingness to pay to restore the fisheries and improve the amenity value ofLake Crist6bal. (The acid rock drainage may also be contaminating surface water sources whichpersons living downstream may be using for drinking or irrigation. However no attempt is madeto measure these.)

103


Estimating the benefits

1. Extending the lifetime of valves,.fittings. pumps, and man-holes,for water and seweragesystem. A large immediate benefit from a program to channel and treat acid rock drainage wouldbe to the underground piping system. Exposure to acid water with a pH of 2 rapidly corrodespiping of zinc, concrete, iron, or copper, and can reduce the system lifetime by as much as one-half (by 10 years for a system with a typical twenty-year design lifetime). In Sol, the pipingshould be replaced by an acid-resistant material, such as PVC or fiberglass, even if the acid rockdrainage from the mine is collected and treated, since there are other sources of acid waters in thearea. The benefits of the channelization program would thus be mainly to the valves, fittings,and pumps (many types of which cannot yet be produced of acid-resistant material in highquality), the man-holes, and the underground structural supports.

There are no data currently available regarding the costs of water and sewerage components inSol, so it is not currently possible to carry out a full cost-benefit analysis for this activity for thissite. However, the approach can be illustrated as follows using plausible figures.

Assume material and labor to install valves, pumps, fittings, and manholes costs US$1 million.Without the project, the system would be expected to last only 10 years before needingsubstantial maintenance or replacement. However, with the project, the system lasts for 18 years(exposure to acidic waters from other sources shortens the lifetime of the system below its designlifetime of 20 years). The channelization and treatment program is a permanent solution, so thebenefits continue many years into the future. The present value of the project over a period of 53years (the valves and fittings are replaced 3 times with the project instead of 5 without theproject) would save US$404,083 in maintenance and replacement costs (see Table W. 15).

2. Savings on operation and maintenance costs for underground piping. Operation andmaintenance costs would also be lower with the project than without the project. Exposure toacid waters causes leaks and water losses in the years prior to replacement, leading to higherpumping and water treatment costs and repair costs for leaks. Assuming that operation andrepair costs for the underground piping system are US$5,000 each year for a 5-year period priorto replacement both with and without the project, but that these expenses are incurred lessfrequently with the project than without over a period of 53 years (See Table W.15). The netpresent value of the savings would be US$13,568 over this period.

3. Savings on building material and repair costs. The benefits for savings on buildingmaterial and repair costs are calculated in the same way as the benefits for extending the lifetimeof the water and sewerage system. However, it is assumed that buildings are repaired each year,rather than being replaced at discrete intervals. Assume that there are 10,000 buildings in Sol,and that each building requires US$5 to repair each year. Without the project, the total annualcost of repairing buildings would thus be US$50,000. If the project reduces repair costs by 80

Workbook 1 05

percent, costs would fall to US$l0,000 per year. The present value of the savings would be aboutUS$397,673 over a period of 53 years.

4. Reduced risk to the deep aquifers. Acid drainage may be contaminating the shallowaquifers of Sol and its environs. There is a risk that acid drainage will eventually contaminatethe deep aquifers, possibly irreversibly. The benefits of a project reducing this risk would be thewillingness of the inhabitants of the region to pay to avoid long-term damage to an importantwater resource. If each adult were willing to pay US$. 10 per year to avoid this risk, recognizingthat the costs of developing an alternative source of drinking water in the future would be high,then the present value from this activity would be US$99,418 (there are about 100,000 personsover the age of 20 in the region of Sol).

5. Restored fisheries and amenity values of Lake Crist6bal. Acid waters emanating frommines in the watershed have contaminated the ecosystem of Lake Crist6bal. Low-pH water haskilled most of the fish in the lake, destroying a source of protein for lake dwellers, most of whomhave gradually dispersed. Restoring the ecosystem of the lake would require a long-rangeprogram! addressing sources throughout the water basin. Assuming that (a) acid rock drainagefrom Javiar mine in Sol is responsible for 10 percent of the total acid water draining into the lake,(b) each adult of the region is willing to pay US$.05 per year to remediate this source, and (c) thenumber of adults is 100.000, then the present value of this activity would be US$49,709.

Total benefits

Total benefits for channeling and treating the acid rock drainage from Javiar in Sol would beabout US$964,500, using these assumptions. This does not include possible benefits to thoseliving downstream who use the water for drinking or irrigation.

Summary of possible benefits of channeling and treating acid rock drainage in Sol

Benefit Category Present Value (USS)

Reduced repair costs for piping components 404,083

Reduced operation and maintenance costs for underground piping systems 13,568

Reduced repair costs for buildings 397,673

Reduced risk to deep aquifers 99,418

Reduced damage to Crist6bai ecosystem 49,709

Total 964,451

105

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6 Remediating Mine Sites to Attract Private Investment

It is important that Bolivia attract private investment to the mining sector which will help torevitalize and modernize the sector and lead to improved environmental management ofindividual mines. An important benefit to Bolivia from remediation activities on COMIBOLmining sites would be to remove impediments to private investment in COMIBOL mines,including through the Capitalization Program.

However, it is important that any agreements to remediate past contamination be very carefullyconsidered, to ensure that remediation funds are used in the best possible way. BeforeCOMIBOL commits to remediating past contamination, it should be sure that legal remedieswould not be sufficient to alleviate concerns about liability for past contamination by potentialprivate investors. Legal protections, such as indemnifications, will often satisfy potential privateinvestors concerned about their exposure to liability for activities that preceded their presence.This approach also permits governments to retain control of the extent and timing of remediation.

In cases where legal remedies are not sufficient to alleviate concerns of private investors,COMIBOL should agree to remediation measures only after the sources of damage have beenclearly identified, delineated, and quantified, and it is fairly certain that activities to eliminaterisk to private investors will be effective. At many mine sites, especially those that have beenoperating for many years, it is often extremely difficult (or impossible) to distinguish damagedue to old mining activities and damage due to new activities. Nor may it be possible todistinguish between flows from one mine and flows from another when both are in the samedrainage basin. Comprehensive studies modeling the hydrology and assessing the toxicology ofthe mine site would be required before COMIBOL commits to remediation activities.

Finally, COMIBOL must be sure that it can indeed carryout the remediation measures more cost-effectively than the private investor. Private investors often prefer to conduct their own clean-upactivities, which they carry out to meet their specific needs and standards. The costs of clean-upwill be capitalized into the price of the mine in these circumstances. However, this reduction inprice may be less than the costs COMIBOL incurs should it carry out the clean-up instead.

107

7 Financial Incentives for Cleaning Up the Environmentwhile Remining Old Tailings and Waste Rock

All COMIBOL mining sites contain large quantities of tailings and waste rock from old millingand mining operations. Much of this material may now be profitably re-mined due to thedevelopment in the past decade of heap-leaching or batch leaching techniques which allowoperators to extract metals from relatively low-grade ores. In Bolivia, such operations arecurrently underway in Potosi, Sol, and Cielo.

The remining old tailings and waste rock provides an opportunity to clean-up the environment, inaddition to providing revenues. The material must be moved and treated, so modernenvironmental standards can be applied in handling and disposing of the waste once it passesthrough the leaching process.

However, not all old waste piles are of sufficiently high quality to be profitably re-mined. Stillthey may produce enough revenue to offset at least some of the costs of cleaning up theenvironment. Where this is the case, it may be economically efficient for COMIBOL to offerprivate entrepreneurs financial incentives to re-mine the waste material, such as subsidies. Thefinancial incentives should not exceed the present value of the benefits of environmentalremediation, calculated in the normal way.

108

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RECENT WORLD BANK TECHNICAL PAPERS (continued)

No. 361 Laporte and Ringold. Trends in Education Access and Financing during the Transition in Central and Eastern Europe.

No. 362 Foley, Floor, Madon, Lawali, Montagne, and Tounao, The Niger Household Energy Project: Promoting Rural FuelwoodMarkets and Village Management of Natural Woodlands

No. 364 Josling, Agricultural Trade Policies in the Andean Group: Issues and Options

No. 365 Pratt, Le Gall, and de Haan, Investing in Pastoralism: Sustainable Natural Resource Use in Arid Africa and the Middle EastNo. 366 Carvalho and White, Combining the Quantitative and Qualitative Approaches to Poverty Measurement and Analysis:

The Practice and the Potential

No. 367 Colletta and Reinhold, Review of Early Childhwod Policy and Programs in Sub-Saharan Africa

No. 368 Pohl, Anderson, Claessens, and Djankov, Privatization and Restructuring in Central and Eastern Europe: Evidenceand Policy Options

No. 369 Costa-Pierce, From Farmers to Fishers: Developing Reservoir Aquaculturefor People Displaced by DamsNo. 370 Dejene, Shishira, Yanda, and Johnsen, Land Degradation in Tanzania: Perceptionfrom the Village

No. 371 Essama-Nssah, Analyse d'une ripartition du niveau de vie

No. 372 Cleaver and Schreiber, Inverser la spriale: Les interactions entre la population, I'agriculture et l'environnement en Afriquesubsaharienne

No. 373 Onursal and Gautam, Vehicular Air Pollution: Experiencesfrom Seuen Latin American Urban CentersNo. 374 Jones, Sector Investment Programs in Africa: Issues and Experiences

No. 375 Francis, Milimo, Njobvo, and Tembo, Listening to Farmers: Participatory Assessment of Policy Reform in Zambia'sAgriculture Sector

No. 376 Tsunokawa and Hoban, Roads and the Environment: A Handbook

No. 377 Walsh and Shah, Clean Fuelsfor Asia: Technical Optionsfor Moving toward Unleaded Gasoline and Low-Sulfur DieselNo. 378 Shah and Nagpal, eds., Urban Air Quality Management Strategy in Asia: Kathmandu Valley Report

No. 379 Shah and Nagpal, eds., Urban Air Quality Management Strategy in Asia: Jakarta Report

No. 380 Shah and Nagpal, eds., Urban Air Quality Management Strategy in Asia: Metro Manila Report

No. 381 Shah and Nagpal, eds., Urban Air Quality Management Strategy in Asia: Greater Mumbai Report

No. 382 Barker, Tenenbaum, and Woolf, Governance and Regulation of Power Pools and System Operators: An InternationalComparisonz

No. 383 Goldman, Ergas, Ralph, and Felker, Technology Institutions and Policies: Their Role in Developing Technological Capabilityin Industry

No. 384 Kojima and Okada, Catchinig Up to Leadership: The Role of Technology Support Institutions in Japan's Casting SectorNo. 385 Rowat, Lubrano, and Porrata, Competition Policy and MERCOSUR

No. 386 Dinar and Subramanian, Water Pricing Experiences: An International Perspective

No. 387 Oskarsson, Berglund, Seling, Snellman, Stenback, and Fritz, A Planner's Guidefor Selecting Clean-Coal TechinologiesforPower Plants

No. 388 Sanjayan, Shen, and Jansen, Experiences with Integrated-Conservation Development Projects in Asia

No. 390 Foster, Lawrence, and Morris, Groundwater in Urban Development: Assessing Management Needs and Formulating PolicyStrategies

No. 392 Felker, Chaudhuri, Gyorgy, and Goldman, The Pharmaceutical Industry in India and Hungary: Policies, Insititutions, andTechnological Development

No. 393 Mohan, ed., Bibliography of Publications: Africa Region, 1990-97

No. 394 Hill and Shields, Incentivesfor Joint Forest Management in India: Analytical Methods and Case Studies

No. 395 Saleth and Dinar, Satisfying Urban Thirst: Water Supply Augmentation and Pricing Policy in Hyderabad City, IndiaNo. 396 Kikeri, Privatization and Labor: What Happens to Workers When Governments Divest?

No. 397 Lovei, Phasing Out Leadfrom Gasoline: Worldwide Experience and Policy Implications

No. 399 Kerf, Gray, Irwin, Levesque, Taylor, and Klein, Concessionsfor Infrastructure: A Guide to Their Design and Award

No. 401 Benson and Clay, The Impact of Drought on Sub-Saharan African Economies: A Preliminary Examination

No. 402 Dinar, Mendelsohn, Evenson, Parikh, Sanghi, Kumar, McKinsey, and Lonergan, Measuring the Impact of Climate Changeon Indian Agriculture

No. 403 Welch and Fremond, The Case-by-Case Approach to Privatization: Techniques and Examples

THE WORLD BANK

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