Mine closure processes and responsibilities
Mine Closure Hub
In brief
- Mine closure is one stage in the mining lifecycle.
- Mine closure planning is part of a mine's core business.
- A key part of mine closure planning is the collection of detailed information about the risks of closure.
- Very few mines have met the criteria for full relinquishment.
Company processes
Mine closure is one of six stages of the mining lifecycle. These stages are:
- Exploration
- Project evaluation – the studies phase, which includes the environmental impact statement (EIS)
- Mine construction
- Mine operation
- Mine closure
- Post-closure – including using mined land for alternative purposes, such as grazing, native habitat/wildlife corridors, renewable energy, tourism etc.
The following animation explains each of the six stages of the mining lifecycle in more detail.
Download the transcript here.
Over the past decade or so, greater attention has been given to the way mining companies plan for and undertake mine closure activities and how they monitor closure outcomes. Closure is now considered part of a mine’s core business and preliminary planning should be undertaken early in the mining lifecycle, such as during project evaluation. The standard of closure planning and when it’s undertaken, however, varies from company to company.
Mining companies undertake closure planning using a multidisciplinary team established specifically for the task. Team members can work on closure planning full-time or on a part-time basis, alongside their broader duties. Although not consistent across the board, there’s a trend among leading mining companies for community relations or social performance practitioners to be incorporated into the closure team alongside environmental scientists, engineers, geologists, accountants and human resources practitioners. This can help to integrate social dimensions into closure planning. Responsibility for mine closure can occur at multiple levels of a company; for example, at the board, corporate (head office), business unit (e.g. Rio Tinto Iron Ore or BHP’s metallurgical coal business) and site levels.
As the mine closure date draws closer, the planning becomes more detailed. Anglo American, for example, has four levels of closure planning that relate to the number of years from the planned closure date. These levels are:
Anglo American, four levels of closure planning >25-15 years out from closure, 15 - 10 years out from closure, 10 - 5 years out from closure and 5 - 0 years out from closure. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Anglo American, four levels of closure planning >25-15 years out from closure, 15 - 10 years out from closure, 10 - 5 years out from closure and 5 - 0 years out from closure. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
The date the mine will close is not fixed until well into the final plan and many factors can intervene to change the closure date. Sometimes a mining company may find additional mineral resources within its mining lease. If the company receives government approval to extend the operation, the life-of-mine will increase, pushing out the closure date. This can occur multiple times, leading to uncertainty for host communities, mine personnel and other stakeholders. Further factors that can influence the timing of mine closure include, but are not limited to, economic considerations, market forces (commodity prices), social/community pressures, government intervention and technological advances.
CSRM researcher, Joel Hamago, speaks with Mrs Ume Wainetti about her experience with the operation and potential closure of Ok Tedi copper, gold and silver mine in the Western Province of Papua New Guinea. Aunty Ume lives along the Fly River, which has been used as a disposal site for mine waste. There have been widespread environmental and socio-economic impacts from this practice.
Aunty Ume also talks about the fate of Sepe village, an island in the middle Fly River region. It was home to more than 50 households. The island was completely washed away due to intense erosion caused by barge movements and other upstream mining-induced impacts. The islanders are now displaced, living in squatter settlements in the nearby town of Daru.
Download the transcript here.
Company management tools
Effective management is needed to drive integrated mine closure planning from the boards of companies throughout the organisational structure so that what happens at each level of the organisation reflects the company’s closure objectives.
Mining companies use a number of tools to help them do this, including:
- company or business closure standards
- mine closure strategy
- mine closure plans
- closure risk registers
- post-closure vision
- independent audits.
These tools guide companies in how they design, operate and relinquish their mines. Leading mining companies define closure outcomes up front. An example of high-level mine closure objectives is listed below.
- post-mining land use is agreed with future landholders
- the site is left in a safe and stable condition consistent with the post-mining land use
- water quality does not cause unacceptable impacts downstream
- the environmental and heritage values of the area are preserved
- positive legacy of the mine is enhanced and stakeholders are supported through the socio-economic transition.
Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Company management tools
Effective management is needed to drive integrated mine closure planning from the boards of companies throughout the organisational structure so that what happens at each level of the organisation reflects the company’s closure objectives.
Mining companies use a number of tools to help them do this, including:
- company or business closure standards
- mine closure strategy
- mine closure plans
- closure risk registers
- post-closure vision
- independent audits.
These tools guide companies in how they design, operate and relinquish their mines. Leading mining companies define closure outcomes up front. An example of high-level mine closure objectives is listed below.
- post-mining land use is agreed with future landholders
- the site is left in a safe and stable condition consistent with the post-mining land use
- water quality does not cause unacceptable impacts downstream
- the environmental and heritage values of the area are preserved
- positive legacy of the mine is enhanced and stakeholders are supported through the socio-economic transition.
Management tool diagram. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Management tool diagram. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Mine closure studies
A key part of mine closure planning is the collection of detailed information about the risks of closure, including potential impacts on communities and business partners, and what needs to be done to address those impacts. Mining companies commission specialists to undertake a series of closure studies. These studies cover engineering, environmental, social and final land use outcomes, which can then be discussed with stakeholders to agree on recommended options. According to a Rio Tinto mine closure team member:
"Closure studies focus on risks and opportunities in each work stream. Scopes of work are very much set based on managing/mitigating risks and realising upside opportunities [….] We’ve got clear guidance and standards on what that means. For example, the required level of engineering, workforce planning and stakeholder engagement are all detailed."
Examples of social studies that may be undertaken during closure planning are:
- socio-economic impact assessments
- engagement plans and strategies
- long-term closure communications plans and strategies
- severance, retraining and retention strategies
- financial aspects: estimating closure costs.
Just like mine closure plans increase in detail as the mine approaches closure, the level of detail and understanding of the studies also increases. The studies are undertaken in stages, called stage gates. Rio Tinto, for example, has three mine closure stage gates: order of magnitude (undertaken 10 years out from mine closure), prefeasibility (undertaken 5 years out from mine closure) and feasibility (1 year out from mine closure). The mine closure stage gate process is like the studies process that mining companies use at the start of the mine lifecycle (project evaluation) when they assess whether or not a mining project merits investment.
Rio Tinto, has three mine closure stage gates: order of magnitude (undertaken 10 years out from mine closure), prefeasibility (undertaken 5 years out from mine closure) and feasibility (1 year out from mine closure). Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Rio Tinto, has three mine closure stage gates: order of magnitude (undertaken 10 years out from mine closure), prefeasibility (undertaken 5 years out from mine closure) and feasibility (1 year out from mine closure). Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Relinquishment
As we highlighted in the mine closure overview, the purpose of mine closure is to prepare the mining leases for relinquishment; that is, for a company’s ownership of and responsibility for a mine to be transferred to the government authority or a third party. For relinquishment to occur, the mining company must complete all obligations outlined in the closure plan to the satisfaction of the authorities and, possibly, other stakeholders. In Australia and in many other jurisdictions (states/provinces and countries), very few mines have met the criteria for full relinquishment. When mines do not meet these criteria, they are left in care and maintenance, sold or abandoned.11
Ok Tedi Mining Limited community relations officers meet with villagers, Papua New Guinea. © OTML (2018), from Community Relations Manual (2nd edition).
Ok Tedi Mining Limited community relations officers meet with villagers, Papua New Guinea. © OTML (2018), from Community Relations Manual (2nd edition).
Tube stock grown for revegetation programs. Photo courtesy of Rio Tinto.
Tube stock grown for revegetation programs. Photo courtesy of Rio Tinto.
Weipa rehabilitation. Photo courtesy of Peter Erskine, SMI.
Weipa rehabilitation. Photo courtesy of Peter Erskine, SMI.
Regulatory requirements
The regulatory requirements for mine closure vary significantly across jurisdictions. CSRM has reviewed mine closure governance and regulation across 10 jurisdictions worldwide: New South Wales, Queensland and Western Australia in Australia, Ontario in Canada, and Chile, Peru, Brazil, South Africa, New Zealand and the Philippines.12
From this review we found that regulators generally require early preparation and regular updating of mine closure plans, although the level of detail stipulated varies considerably. A common factor across jurisdictions is the focus regulations place on biophysical issues. For example, a mine must be left in a safe, stable and non-polluting condition, with all infrastructure decommissioned, decontaminated and demolished; disturbed land rehabilitated; and any residual contamination remediated.
Few jurisdictions require consideration of the social aspects of mine closure. None of the regulations we reviewed has social closure criteria, though a few address post-closure land use and stakeholder engagement.
World map with New South Wales, Queensland and Western Australia in Australia, Ontario in Canada, and Chile, Peru, Brazil, South Africa, New Zealand and the Philippines highlighted green.
World map with New South Wales, Queensland and Western Australia in Australia, Ontario in Canada, and Chile, Peru, Brazil, South Africa, New Zealand and the Philippines highlighted green.
Six financial assurance mechanisms diagram: deposit of cash, insurance, trust fund, guarantee, with others & security bond. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Six financial assurance mechanisms diagram: deposit of cash, insurance, trust fund, guarantee, with others & security bond. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Six financial assurance mechanisms diagram: deposit of cash, insurance, trust fund, guarantee, with others & security bond. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Six financial assurance mechanisms diagram: deposit of cash, insurance, trust fund, guarantee, with others & security bond. Illustrations by Darren Sprott, Design Solutions Australia Pty Ltd.
Financial assurance and closure bonds
Some jurisdictions require that mining companies set aside (or otherwise guarantee the availability of) funds to carry out closure activities. The term ‘closure bond’ is also used in this context.
There are six main types of financial assurance mechanisms:
- Deposit of cash (or other liquid assets) into a government-controlled account
- Insurance policy (paid for by the company as premiums) that covers closure costs
- Payment of funds into a trust, payable to the regulator in the event of non-performance of closure obligations
- Surety bond – a contractual relationship whereby a third-party surety (typically a bank or surety bond company) guarantees the mining company’s performance of closure obligations and provides additional funds in the event of default.
- Provision of a corporate guarantee (self-bonded).
- Payment of fees into a bond pool with other companies.
Most financial assurance is focused on the biophysical aspects of mine closure. In other words, the bonded amounts are not set aside for social impacts arising from mine closure.
A recent global survey showed that while governments are aware of the importance of mine closure, many do not have the policies, regulations, enforcement or capacity to manage and regulate it.13 Only 45% of the countries that responded to the survey require adequate financial assurance for mining operations to rehabilitate, decommission and close the operation in its current state. Without financial assurance regulations, there is considerable risk that governments will have to bear the significant costs to close abandoned mine sites.
The following audio provides a summary of financial assurance and closure bonds.
Download the transcript here.
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