When a mud rush struck Freeport Indonesia’s Grasberg mine this September, operations halted and rescue teams mobilized to save trapped miners. Grasberg is one of the world’s largest copper operations, producing nearly 5% of global supply. Any disruption there sends tremors through global markets.
But for asset managers, the story isn’t only about geology or commodity prices. The real lesson is broader: the assets we too often ignore are the ones that can destroy us.
Beyond Grasberg: A Pervasive Problem
The mud rush at Grasberg is tragic and costly, but it isn’t unique. Supporting infrastructure — waste yards, drainage systems, ground monitoring galleries, tailings pipelines, backfill systems, emergency egress routes — isn’t glamorous.
These assets don’t directly mill ore, refine metal, make paper, or distill product. Yet when they fail, they can bring entire operations to their knees, often with consequences far greater than a failed pump, motor, or press.
And we’ve seen it elsewhere:
- The Lomas Bayas copper mine fire started in a waste yard, not the concentrator.
- Pulp and paper mills have lost weeks of production due to wastewater treatment plant breakdowns.
- Petrochemical facilities have been crippled by cooling tower collapses or flare system malfunctions.
- Utilities have failed customers when emergency diesel generators didn’t start during outages.
In each case, the so-called “peripheral” asset proved to be the critical vulnerability.
The Psychology of Neglect
If the risks are so obvious, why do organizations repeatedly underinvest in these assets? The answer lies in the way humans and institutions perceive risk and value (Figure 1).
- Salience and Visibility Bias – We focus on what is visible and measurable. The mill or boiler is front and center on dashboards and KPIs, while a drainage gallery sits underground, out of sight and out of mind. Leaders manage what they see.
- Survivorship Bias – Near misses reinforce complacency: “We’ve gotten away with it before.” If a tailings pipe has leaked several times without catastrophe, the lesson drawn is that it isn’t urgent — when in fact luck is simply masking fragility.
- Normalcy Bias – People underestimate the likelihood of disasters simply because they haven’t experienced them. If a tailings dam has never failed on their watch, they assume it won’t — until the day it does.
- Diffusion of Responsibility – Core assets have clear owners: process engineers, maintenance teams, OEMs. Support systems often fall between departments or are outsourced. When everyone is partly responsible, no one is truly accountable.
- Principal–Agent Problem – Executives, managers, and contractors have different incentives. If bonuses are tied to quarterly output, no one is rewarded for preventing a low-frequency, high-consequence disaster years down the road.
- Risk Homeostasis – Even when safety upgrades are implemented, people often compensate by relaxing elsewhere, keeping overall exposure constant. A “strengthened” tailings dam may paradoxically lead to reduced monitoring.
- Economic Myopia – Capital budgeting tools like IRR and NPV privilege projects that increase output quickly. Risk-prevention projects for drainage systems or fire suppression rarely make the cut.
Figure 1 – The social psychology of peripheral asset neglect.
Together, these psychological and economic forces explain why organizations so often neglect the very systems that are most capable of generating existential events.
Risk Management and the Black Swan Trap
Peripheral systems are frequently classified as “low probability.” That’s misleading. They are low probability, high consequence — the textbook definition of a black swan.
- A concentrator motor failure may cost days of output.
- A tailings or wastewater breach can end a license to operate.
- A flare system failure can wipe out an entire petrochemical complex.
- A failed emergency egress system can turn a containable incident into a human tragedy.
Traditional risk matrices, which weight probability more heavily than consequence, systematically under-prioritize these assets. Reliability professionals must push for consequence-weighted approaches.
Cross-Industry Vignettes: Grasberg Isn’t Alone
- Mining – Grasberg (Indonesia): The September mud rush halted one of the world’s largest copper mines, reminding us that ground stability and drainage are as critical as grinding mills.
- Mining – Lomas Bayas (Chile): A waste yard fire — far from the concentrator — disrupted copper output, showing how “non-core” areas can cascade into the supply chain.
- Pulp & Paper – North America: Several mills have suffered catastrophic downtime when wastewater treatment facilities failed. Regulators shut the entire mill, even though the paper machines were running perfectly.
- Petrochemicals – U.S. Gulf Coast: Cooling tower collapses and flare system failures have knocked out entire plants, costing hundreds of millions and sparking OSHA and EPA investigations.
- Utilities – Global: Backup diesel generators failed during blackouts and disasters in the U.S., Japan, and Europe, leaving entire cities without power when reliability mattered most.
The pattern is clear: neglected, “supporting” assets are often the true existential risks.
LoPAPs for the Forgotten Assets
Every asset deserves a Life of Physical Asset Plan (LoPAP) — Replace, Rebuild, Lubricate, Clean, Adjust, Calibrate, Monitor, Inspect, NDT — mapped from installation to retirement (Figure 2).
Figure 2 – The bridge from neglect to management for often-ignored peripheral assets.
Neglected assets often have no LoPAP. They’re treated as afterthoughts, with no clear ownership. Yet these are precisely the systems that, when they fail, create the most severe ESG disasters, reputational wounds, and financial hits.
A best-practice benchmark:
- 100% of time- and usage-based tasks in place at startup.
- 80% of predictable monitoring-, inspection-, and NDT-directed follow-up tasks embedded before operations commence.
And this must apply not just to mills and presses, but to drainage galleries, flare systems, wastewater plants, fire suppression systems, and egress routes.
Procedures and Accountability
SOPs and SMPs cannot stop at the production unit.
- When was your last drill on a tailings pipe rupture or cooling tower collapse?
- How often are waste yard firefighting systems tested?
- Do drainage galleries or flare stacks appear on your predictive dashboards?
If not, the vulnerability isn’t technical. It’s cultural.
True accountability requires governance frameworks like ISO 55000, clear RACI assignments, and board-level oversight. If no one owns these assets, no one manages them.
Sustainability and License to Operate
This issue is not only about operational continuity. Reliability is sustainability.
- In mining, copper disruptions ripple into global electrification.
- In pulp and paper, untreated wastewater damages ecosystems and erodes community trust.
- In petrochemicals, flare system failures accelerate emissions and endanger workers.
- In utilities, backup power failures undermine resilience for entire cities.
Supporting assets are often the ESG-critical systems. Failures here can erase decades of trust, provoke regulatory intervention, and cost billions. Preventing a tailings failure is as climate-critical as reducing diesel consumption. Both protect society’s ability to decarbonize and the company’s license to operate.
Implementation Playbook: From Insight to Action
Organizations can operationalize these lessons with a structured 90-day plan:
- Asset Register Sweep
- Identify every “forgotten” system: drainage, waste, flare, cooling towers, wastewater, fire suppression, egress.
- Assign clear ownership.
- LoPAP Development
- Build task sets: Replace, Inspect, Lubricate, NDT.
- Benchmark against world-class practices.
- SOP/SMP Drills
- Run rupture simulations, fire suppression checks, evacuation drills.
- Embed them in culture, not binders.
- Instrumentation & Monitoring
- Add sensors, predictive analytics, dashboards for hidden systems.
- Integrate with the same KPI rigor applied to production assets.
- Board-Level Reporting
- Elevate “peripheral asset” risk to ESG and audit committees.
- Treat it as strategic, not technical.
The Call to Asset Managers
Grasberg is only the latest reminder of a truth our profession has long known but too often ignored: the assets we don’t see are the ones most likely to blindside us. And when they fail, the consequences extend far beyond production and profit.
- A tailings dam disaster contaminates rivers, destroys livelihoods, and scars communities for generations.
- A wastewater treatment breakdown leads to regulatory shutdowns, reputational damage, and public outrage.
- A power utility’s failed backup system plunges entire cities into darkness at the moment of greatest need.
These are not just operational failures. They are societal failures. They erode trust, destroy social license to operate, and undermine industries critical to the global economy.
That’s why this cannot be treated as a narrow technical issue. It’s a leadership and cultural mandate:
- Redefine “core” to include every asset that protects people and communities, not just those that produce throughput.
- Embed LoPAPs and SOPs for drainage, tailings, flare, and wastewater as rigorously as for mills and turbines.
- Put “peripheral” assets on dashboards and in boardrooms — they are ESG-critical.
- Make resilience part of executive KPIs, not just production.
The real asset of an operation isn’t just the ore body, the press line, or the turbine hall. It’s the total system — from drainage to concentrator, cooling tower to distillation column, wastewater to egress — that keeps people safe, operations sustainable, and communities whole.
When we neglect the assets we think are peripheral, they remind us — often violently — that they were essential all along.
