Progressive release of security to incentivise and fund closure

Abstract

Most active mines in Canada now have closure plans in place and have posted some form of financial security with the government. At the same time, the number of inactive mines that have fully implemented final closure (as opposed to staying in 'care and maintenance') is relatively small. In some cases, this hesitancy to complete closure is related to uncertainty as to how and when the security will be returned to the mining company. This paper describes a case history where cooperation between government, regulators, and a mining company resulted in agreement to progressively release the financial security in stages in response to closure work that had been competed during operations, interim care and maintenance, and final closure stages. This provided an incentive to proceed with the completion of the final closure measures and it also provided a flow of cash (or credit release) to fund final closure of a long inactive property. It is suggested that progressive release of closure financial security could mobilise large amounts of capital to implement final closure on numerous long inactive mine sites.