Calls have been made to review the way mining rehabilitation bonds are calculated, and to require the amount in the bond to be reassessed when a new owner takes over.
Calls have been made to review the way mining rehabilitation bonds are calculated, and to require the amount in the bond to be reassessed when a new owner takes over. Lyndon Keane

Five of six times, mine rehabilitation fund was not enough

Tapping into rehabilitation bonds: By the numbers

When a mine starts up, the company hands over an agreed amount of money to the state government, to fund the mines eventual rehabilitation.

In the past seven years, the state government had to tap into this fund six times.

But in five out of these six cases, there was not enough money.

  •  $3.4million in financial assurance has been claimed and finalised in the past seven years.
  • Three claims totalling $170,000 were made in the five years between 2009 and 2014. 
  • Three claims totalling $3.23million were made and finalised in 2015. 
  • On five of those six occasions the financial assurance did not fund the full costs of rehabilitation.  

Calls for review

The sale of Anglo American's Foxleigh mine last week has prompted calls to reform the purchasing process so environmental obligations are more likely to be met.

Anglo's 70% share in the Foxleigh coal mine at Middlemount will be purchased by Sydney's Taurus Fund Mangement through a transfer of shares, which means there will be no review into the amount of money the new owner will set aside for the eventual rehabilitation of the mine site.

This money is set aside in the form of a rehabilitation bond, which the company gives to the Queensland Department of Environment.

However, a department spokesman said on five of the six occasions between 2009-2016 that government had needed to tap into this bond, there had not been enough money available.

Mackay Conservation Group spokesman Peter McCallum believes this may be, in part, because mining companies with a "good track record" get a discount of up to 30% on the bond.

He believes Anglo American was likely to have received this maximum discount.

But if this bond is transferred to a company with fewer means, it becomes less likely they would be able to cover the 30% difference between the cost of rehabilitation and what's available in the bond.

That's why Queensland Greens senator Larissa Waters has called for a review of the process following the Foxleigh sale.

"We need to... make sure the government has collected adequate rehabilitation bonds from mining companies in the first place," she said.

The Greens proposed a national audit and a Mining Trust Fund in September 2015.

"According to the Queensland Audit Office, the mining rehabilitation bonds held by the Queensland Government are inadequate," she said.

Government pledge to investigate

 The department of environment spokesman confirmed there was a discount system of up to 30% for operators that demonstrate "sound financial and environmental performance".

But he said government would be investigating 'the expansion of upfront rehabilitation bonds for resource companies to fully fund long term rehabilitation activities'.

He also said the department had been given the task of analysing current financial assurance arrangements and mining rehabilitation performance "to ensure these are consistent with this commitment".

He said the work would be proceeding in close cooperation with the Queensland Treasury and relevant agencies.



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