Currently, a very wide range of financial assurance practices has been adopted by governments internationally; in certain circumstances insufficient funds are being set aside, and in others, funds are excessive. ICMM members are deeply concerned by the social and environmental impacts of abandoned mines and view their potential creation as a risk to their reputations and to that of the mining industry generally. For this reason, we endorse the development of government policies that support responsible environmental mine closure and reclamation (or rehabilitation). Within this context, there is a need to ensure that the application of financial assurance is efficient, fair, consistent and transparent.
This paper provides guidance on environmental financial assurance for mine closure. It is based on research carried out in 2005 on current practices, policies and issues in this area (see report 'Financial Assurance for Mine Closure and Reclamation').
Key issues that currently arise with environmental financial assurance for mine closure include:
- There can be a lack of clarity on what is an acceptable closure standard. This can have a significant impact on closure costs and give rise to unanticipated costs;
- There is a wide variation in the methods used to calculate closure costs and unnecessarily conservative assumptions are increasingly being applied. Together, these factors can result in a significant over-estimation of actual costs;
- Current policy approaches are sometimes based on a 'worst case scenario' perspective that does not distinguish between the environmental commitment, record of performance, and business strength of a company.
This Guidance Paper provides general recommendations for actions by both mine operators and governments that are aimed at improving standards of practice. This includes a call for operator's to provide adequate financial assurance for mine closure and outlines a number of environmental considerations that should be taken into account in closure planning. The recommendations also call for regulator's to provide flexibility in financial assurance, consider existing operations, allow for an exit strategy and take taxation arrangements into account.