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Mine Closure Review: Planning for Successful Rehabilitation

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Mine Rehabilitation & Closure / Mining & Resources

Mine Closure Review: Planning for Successful Rehabilitation

Key points:

  • Mine closure has become a core part of a much wider industry conversation around social responsibility, environmental stewardship and corporate governance
  • A survey of mining leaders run with industry partners SRK Consulting and independent professional services company, Turner & Townsend, found that more than half of the 400 mining industry professionals regarded mine closure as ‘crucial’ for development planning, while a further 11% said it was a ‘rapidly growing concern’.
  • Only 7% said mine closure planning was only a ‘secondary concern’.
  • The biggest problem with closure stakeholder engagement is that mining companies usually do it later in the mine life

 

In 1999, as the Giant mine on the outskirts of Yellowknife in Canada’s Northwest Territories was nearing end of mine life, low gold prices forced owner Royal Oak Mines into receivership. Responsibility for the mine’s closure was transferred to Indigenous and Northern Affairs Canada, a department of the federal government.

This was no ordinary clean-up job. During a half-century of operations, the Giant mine produced 237,000 tonnes of arsenic trioxide waste. Under the remediation plan approved in 2014, the waste was being frozen underground at a cost of more than C$1 Billion to the Canadian taxpayer.

Around the same time, another historic mine was shutting down 2,000km to the south in Kimberley, British Columbia. This was the Sullivan mine, a zinc-lead-silver mine that operated for more than a century. The Consolidated Mining and Smelting Company of Canada began engaging the local community on mine closure as far back as the 1960s. Today, the 1,100ha former mining area has a privately-owned ski hill and golf course, as well as a 1.05MW solar farm that is owned and operated by Teck (who continues to maintain responsibility for water treatment).

By preparing for closure and engaging stakeholders early in the mine life, Sullivan’s operators were ahead of their time. Thanks to tighter regulations and a cultural shift in the industry’s approach to stakeholder engagement, it’s likely more closures will resemble Sullivan in the future. But unlike Sullivan’s operators, it appears too many mining companies are still not preparing early enough for closure.

 

Working on stakeholder collaboration

In a survey of mining leaders run with industry partners SRK Consulting and Independent professional services company, Turner & Townsend, the majority of respondents said the sector was ‘somewhat effective’ at collaborating with stakeholders around closure plans.

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“We’ve definitely seen progress,” said Dawn Brock, mine closure lead at the International Council on Mining & Metals (ICMM).

“In the earlier years, regulations were mainly focused on the technical aspects of mine closure. But after seeing mining companies fall short on delivering on closure, there has been a lot of community and regulatory pressure, so mining companies have had to step up their game in terms of collaborating with stakeholders.”

Best practice has undergone significant change between 2008, when the ICMM published its first mine closure toolkit, and last year, when it published new guidelines. The 2019 Integrated Mine Closure Good Practice Guide is notable for its heavy focus on integrated planning for the social and environmental impacts of closure.

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Mark Wainwright, Turner & Townsend managing director of Mining, agreed that this emphasis had shifted in a positive direction.

“Mining houses have realised that their ESG (Environmental, Social and Governance) responsibilities to both society at large and investors will determine both their social licence to operate and impact on sentiment for future development. Simply put: to close a mine too quickly and with insufficient attention to all affected players will not sit well with the next proposed development. The mega miners we support have recongised this and we are giving urgent attention to their closure programmes.”

 

“The biggest problem with closure stakeholder engagement is that mining companies usually do it later in the mine life”, said SRK group chairman Jeff Parshley.

“The challenge is, at that point of time, you’re talking about one side of the boom-and-bust economy. You’re talking about the bust-side – there’s a realisation [in the community] that what has been is no longer going to be after the mine shuts down. It’s a hard thing for communities to understand. It’s hard for them to envision what their community is going to look like after the mine is gone.”

Decipher’s Stakeholder module enables you to easily identify and track stakeholder profiles and important stakeholder metrics, including the ability to capture ongoing engagements, highlight trends in stakeholder sentiments and themes, and assign related actions to team members.

 

Capital requirements a major hurdle

One thing that respondents to the industry survey were in broad agreement on was the need for mining companies to improve how they estimate closing costs. When asked how often adequate capital was set aside for effective closure, 84% respondents said half the time or less.

Troy Dunow, Turner & Townsend Director estimated most mine closures overran the initial cost estimate by between 20-100%.

Dunow, who has also advised many companies on mine closure, said bond programmes actually provided an incentive to mine developers to under-estimate closure costs while in the initial licencing phase.

“[Mining companies] have a good reason to try to keep that low as possible to limit costs. I think that’s why there’s not adequate capital,” he said. “Then, as they get closer to closing and look at costs, the number significantly increases.

“Of course, legislation can change over the life of the mine with added impacts but it’s down to the mine owners to keep abreast of this. Most jurisdictions we work in require an environmental management plan including cost. While the baseline studies are by their very nature high level, they have to be revisited and revised as the feasibility develops towards a bankable study. We have seen these estimates are not re-baselined and thus have to be reworked at a very late stage.”

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Climate change to tighten rules

 

Looking forward, climate change will likely lead to tighter closure and financial assurance requirements. Brock noted that some jurisdictions – including various Australian states – had begun advising miners to address climate changes as part of mine closure plans. “It’s quite minimal at this stage, but we will see it more and more in numerous jurisdictions.”

In the Australian state of Queensland, developers of new mines are required to submit a Progressive Rehabilitation and Closure Plan (PRCP) in addition to an environmental assessment.

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Closure plans must suit the terrain

When we asked the experts for good examples of mine closures, responses included: Sullivan, the re-purposing of German coal mines into museums and recreational areas, and the re-purposing of a former Orano openpit uranium mine in South-Central France into a leisure centre with a fishing lake. Learn more about these 5 examples of extraordinary re-purposed mine sites.

Parshley commented, “Post-mining land use doesn’t have to be something that generates income or revenue,” he said.

“The World Bank’s definition of a mine closure plan implies it has to have an economic benefit. But I would argue that if there really isn’t any viable, sustainable alternative to generate income for the site, then maybe just turning it back to a safe and stable environment where nature can re-establish itself is perfectly acceptable.”

 

According to SRK Consulting, the process should take into account any achievable ideas put forward by stakeholders. “It may be that the stakeholders have a post-closure vision for a site that can provide future benefits for everyone,” Parshley said.

“You may need to adjust the closure plan to help facilitate that. That’s where I see the true opportunity for collaboration in mine closure.”

Once a closure plan has been formulated, it then becomes possible to hire the right people to carry it out.  Based on her regular discussions with mining companies and suppliers, the ICMM’s Brock said companies were having no trouble attracting the right talent. Looking forward, she said closures would require the hiring of people from a range of disciplines. rehabilitation compliance software mine rehabilitation software environmental obligations software land rehabilitation software environmental management software environmental data management software environmental monitoring software environmental compliance software - DecipherGreen

“A closure specialist could coordinate and be responsible for closure, but you still need inputs from a number of other relevant disciplines to be successful,” Brock said. “A number of these closed mines can be engines for development beyond their own life. In the next few years, there will be a big change in terms of talent because you’ll be looking for economists and people in finance and development, to look at what is feasible post-mining.”

Learn more about CRC for Transformations in Mining Economies (CRC-TiME), a national and collaborative initiative to help the industry drive progressive rehabilitation, and enable effective closure and relinquishment of mine sites.

Learning from each other

The one area of improvement all experts agreed on was the need to plan for mine closure as early as possible. Another important recommendation was to share information.

“As closures become more prolific and companies like ourselves are able to analyse the numbers, cost bench-marking and best practices in closure will be possible,” Dunow said. “We along with partners like SRK have that data ready for application.”

Brock suggested companies were overly protective of the tools they have developed in-house to deal with things like closure costs. She said this would need to change for the industry to truly move forward.

“The next step is getting mining companies to share that more openly and share successes that others can learn from. They might not want to talk about it if it hasn’t been successful, but there are still things to learn.”

Mining Journal - Whitepaper on Mine Closure Review 2020

 

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Originally published by Mining Journal & SRK Consulting.

 


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