Mining at a given site cannot go on infinitely. When extraction of the minerals is complete, there is no value in the mine site anymore, and it is time to withdraw. Sometimes there may still be minerals to extract, and it is the case that changes to financial viability have made mine closure the best option.
Mine closures within the Australian mining industry occur for various reasons. In some instances, a mining corporation may have exhausted a site’s potential. In others, it may simply not fit into the mining corporation’s plans going forward. There is also the possibility that a mining corporation needs to withdraw from the site due to bankruptcy or insolvency. As environmental, social and governance considerations (ESG) continue to represent key components of mining and energy projects, adequate consideration and planning of long-term environmental and social outcomes are critical to the success of a project.
In this article, the team at Hetherington mining lawyers will be exploring how the process of mine closure has changed over the years and discussing the obligations of Australian mining corporations in the modern era.
In the early days of Australian mining, a mine that was being decommissioned was often left as it was. Over time, it became increasingly clear how problematic this approach was. There were examples of extensive ground disturbance and equipment and infrastructure left about. The environmental impact, for example through water run-off or windstorms, was significant on surrounding areas. Flora didn’t always regrow, fauna didn’t always return, and the surrounding communities were impacted by the now-abandoned site, economically and emotionally.
These problems give some insight into the motivation for the governance frameworks that apply to mine closure in Australia in the modern day. A mining corporation that is decommissioning a mine site will have Australian state-based and national legislation to consider, as well as their own internal policies which relate to and govern the closing of mines.
This is particularly true for medium to large-scale mining corporations, which have the foresight to act in accordance with clearly established standards and to ensure that, through being responsible, they have the social licence and clean track record for future mining pursuits.
Any responsible mine closure operation requires the setting aside of sufficient funds and the allocation of adequate cashflow. Knowing that all mining operations are finite is an important precept for planning for a mine and is vital to keep in mind even at the point of tenement application.
Closure planning must commence at the same time as the mineral exploration or mining tenements application are considered, given feasibility of closure should inform decision-making. Early and integrated pre-planning is essential for many reasons. For example, poor forward planning may result in a corporation failing to salvage soil prior to contamination; or poor decisions about excavation that will result in physical land instability post-closure.
Both the applicable legislation and a company’s own policies and performance framework will have numerous priorities to address, which are likely to include:
Some of these measures, particularly those around reducing risk, may be mandatory. A central component of any mine closure is risk management; however, your exact obligations will depend on the applicable legislation in the jurisdiction in which you operate, as well as the type of mine. Going above and beyond the minimum can also have its benefits, which need to be weighed carefully.
The level of responsibility that a mining corporation has is shaped by the level of disruption that its mine site has caused, in the eyes of the community and the regulatory framework. It is easy to underestimate or overestimate your environmental impact. Disruption must be measured comprehensively, which neglecting any aspect. How about the access and haul roads? The process plant sites and support infrastructure? The impact on drainage paths? The chemical reactions that can occur in tailings? The risks associated with hazardous materials, such as explosives, fuels, and solvents?
In order to ensure you meet your ESG requirements, maintain a social licence to operate, and do not expose yourself to undue risk through a less than comprehensive understanding of relevant legislation and statutory guidelines, a mining corporation needs to engage specialised legal support.
Contact the tenement management company, environmental consultants and mining lawyers at Hetherington today for legal support with your mine work health and safety, tenement compliance, program of work, tenement management or mine site closure.