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How integrating mine closure into business planning and decision making can generate value, reduce risks and liabilities

5 November 2020

Closure is a life cycle phase not a discipline, and as such relies on input from many different areas of the business. Robust closure governance is critical to underpinning the successful execution of an integrated closure process, writes ICMM’s Alice Evans.

Effective mine closure involves the reconciling of company resources with the closure goals of local communities, regulatory commitments and the priorities of other stakeholders. By investing in robust closure governance mechanisms, companies can generate multiple returns on investment by improving planning and decision-making capacity, while reducing closure risks and liabilities.

Good practice generates value and reduce risks and liabilities

ICMM’s 'Integrated Mine Closure: Good practice guide', published in 2019, recommends that companies establish adequate levels of closure governance through the adoption of company closure policies or standards that establish expectations, roles and responsibilities, and the mechanisms necessary for coordinating the planning process.

The advantages of having clear sight of these structures, systems and processes are many. Among them is the ability to identify clear synergies between discipline roles, removing operational silos and improving relationships between both the closure and other operational teams. An example of this is the incorporation of closure design and costing into mine planning software, which enhances identification of progressive rehabilitation opportunities as site teams operate with closure in mind.

Healthy closure governance mechanisms also provide positive oversight of key performance indicators (KPIs). KPIs help site teams to measure closure performance and  improve cost estimation across the business, both important for driving consistency and improved outcomes. This project management approach to closure leads to improved rigour in the overall process, with clearly defined roles, responsibilities, budgets and targets that can be measured throughout the life of mine and beyond.

Some of our company members already have specific employee targets or closure KPIs  relevant to the mine planner, geologist and engineers. Their application ensures everyone on site is working towards the same end goal of minimising risks and cost.

In addition, it is of course beneficial for a site to have a dedicated team of inhouse experts with experience of implementing closure and rehabilitation projects to improve outcomes and multiply capacity by building knowledge and awareness among employees. The result of which is most likely to be improved closure outcomes as mine staff become more adept at incorporating closure requirements into their work.

Challenges of integrating closure into business planning

There are clearly benefits to embracing closure governance, but this is not to say that it is always easy.

The social transitioning of host communities to reduce dependency on the mine and engagement with stakeholders (including employees, regulators, communities, suppliers and wider society) are often the most complex closure challenges, which can complicate how they are best integrated into business planning activities. These challenges can be exacerbated if there is a lack of alignment between social performance expectations and the company closure standard, if there is an absence of clear metrics to assess performance, or if closure is placed in a silo, with no clear engagement process with social or human resources departments.

Through a commitment to closure governance, none of these challenges are insurmountable. In addressing these challenges, through the integration of social transition considerations throughout the operational phase for example, companies enhance their opportunity to leave a positive social legacy.

What does this mean in practice?

Recognising the importance of closure governance, several ICMM members have recently updated, or are in the process of updating, their approach to integrated closure management.

In a recent survey of ICMM company members[1] that sought to identify how they are integrating closure into business planning and decision making, we are able to see that multi-layer governance structures are most commonly adopted. This type of structure allocates responsibilities across the company, from the operational asset level through to corporate level decision making apparatus. In summary, this approach constitutes an:

  • Asset level closure team – staff responsible for developing and implementing closure plans and progressive closure to minimise financial, social and environmental liabilities through an asset’s lifecycle.
  • Executive / regional / group level – responsibilities include developing and maintaining the company closure standard / protocol / toolbox / guidance material and conducting internal reviews of individual asset performance against the company requirements (eg a closure standards or protocol) and best practice.
  • Corporate/ Board level oversight – strategic view and oversight of closure risks to the business.

A strength of this structure is that it allows for interactions at and between these various levels. Managing this interaction and collaboration is facilitated by having a clear company closure policy or standard, which ensures the correct resources are involved and allocated as required.

According to the survey, 72% of company members currently have a companywide standard / protocol / toolbox or guidance material to standardise the approach taken for closure planning and closure cost estimation across the business.

Additionally, relationship building with operational, environmental, social, financial and legal teams was deemed essential for successful closure integration. In some instances, a multi-disciplinary team is required to develop the closure plans for an asset to ensure that the closure plans adequately address multifaceted risks. However, while structures or systems may be in place to support integration, decision making is ultimately influenced by the appropriate level of knowledge, experience and strong working relationships.

While we are seeing the benefits of robust closure governance models in case studies from company members, it is also clear that effective closure governance requires a cultural or mindset shift within an organisation to truly integrate closure. Increasing awareness of how a proactive approach to closure today, can influence the transition from mine site to the future land use is an important paradigm shift in business planning and decision making.

Ultimately, it all comes down to company culture and collaboration with stakeholders.

Recognising this, ICMM is actively supporting members to find their own paths, encouraging and coordinating collaboration and knowledge sharing of closure challenges and opportunities to promote closure governance mechanisms that work.

For more information on this topic, see ICMM’s Integrated Mine Closure Good Practice Guide.

See a case study on governance from our member Glencore.

[1] 18 out of 27 member companies responded to the survey