Francis Logan

Francis Logan

Minister for Energy; Resources; Industry and Enterprise

    Review creates greater security for mine rehabilitation

    5/08/2008 12:00 AM

    The State Government has approved a new assessment system to encourage mine owners to fulfil their tenement obligations for mine closure and rehabilitation.


    Resources Minister Francis Logan said the new system would help reduce the State Government’s risk when these obligations were not met.


    Mr Logan said the new system was the key recommendation of a review of mining securities, conducted by the Department of Industry and Resources.


    He said the review had identified an increased financial risk arising from higher mining operational costs, changed community expectations and mine rehabilitation standards.


    “The review recommends industry provide Government with a more accurate measure of rehabilitation and mine closure costs in accordance with accepted accounting standards,” the Minister said.


    “This would bring Western Australia into line with other Australian jurisdictions.”


    Under the new scheme, which will begin in July 2009, mine owners will be required to provide a self-calculated estimate of the rehabilitation and closure costs of proposed mining operations.


    Mr Logan said this estimate would need to be verified by a third party.


     “A new bond estimation tool will be developed to help companies produce a more consistent and accurate estimation of these costs, which must be paid before a project begins,” he said.


    “Unlike the current bond calculation system, the tool will take into account cost factors such as increases in the consumer price index, the cost of mobilising equipment over long distances and post-closure monitoring.


    “The review also recommends providing more clarity to industry on mine closure requirements through amendments to regulations and the creation of new supporting guidelines.


    “Bonds for exploration will only apply to proposed higher risk mineral exploration activity, which will streamline approvals and reduce administration costs for industry and government.”


    Mr Logan said the review involved extensive consultation with industry, government and community stakeholders over the past two years.


    Mining securities in the form of bonds were applied under the Mining Act 1978 to encourage compliance with mine rehabilitation requirements and ensure sufficient funds were available to rehabilitate lands disturbed by mining if a tenement holder did not fulfil their obligations.


    Chamber of Minerals and Energy of WA acting director Aileen Murrell welcomed the review and said the chamber was committed to working collaboratively on developing a new and alternative assessment system for future consideration.


    “While we have given in-principle support for the development of an alternative bond calculation methodology, final support will depend on it addressing the needs of industry in such areas as bond reduction, bond retirement, administrative simplicity and environmental benefit,” Ms Murrell said.


    “More broadly, the resources sector remains committed to sustainable development practices and continues to take its environmental management obligations seriously.”


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