The idea in brief:
- Mine rehabilitation is a key aspect of the resource project life cycle. The failure of inadequate rehabilitation can lead to significant environmental issues – and substantial costs for industry stakeholders, and in their failure or absence, the Australian taxpayer.
- In February 2017, the Australian Senate referred the Environment and Communications References Committee to inquire and report on the “rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities, for example under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)” (the inquiry).
- The inquiry was required to have regard to matters including the cost of rehabilitation for current projects, the adequacy of existing regulatory and policy arrangements, the effectiveness of current Australian practice and other related matters.
- The inquiry was required to report back to the Senate by 23 August 2017, however, was varied in March 2018 to extend to consideration of the rehabilitation of power station ash dams. Another extension of time was granted in November 2018.
- Despite significant industry stakeholder input and engagement, and notwithstanding the recognition of “significant environmental and social concern arising from legacy mining sites in Australia”, the Committee failed to research consensus on a unanimous set of recommendations. Instead each political party with members on the Committee (Australian Greens, Liberal Party, Australian Labor Party, and Centre Alliance) provided a series of their own recommendations, those recommendations are summarised below.
- The Committee chair noted: “It is disappointing that despite nearly two years of submissions, site visits and hearings, that the committee has not been able to arrive at a set of agreed recommendations.”
- The failure of the Committee to arrive at a clear set of recommendations highlights the degree of contention around mine closure project activity and rehabilitation obligations.
The idea in detail
- The Committee heard that there were approximately 400 operating mines in Australia at present, and more than 50,000 abandoned mines that concluded operations before significant environmental regulations – all of which (operating and abandoned) require mine rehabilitation in one form or another.
- The failure to properly rehabilitate these developments (and failure to rehabilitate mine sites in the past) is a cause of serious concern for the surrounding environment and landholders, and the mine site itself.
- Mine rehabilitation also has a societal element – with mine closures often having significant impacts on surrounding communities.
- The inquiry received more than 93 submissions from a series of public and industry stakeholders, and the Committee attended ten mine and power station sites, including the McArthur River Mine, the Ranger Uranium Mine, BHP Yarrie and Shay Gap, and the Augusta Power Stations.
- It is important to note that the responsibilities for mine rehabilitation from a regulatory perspective are largely state or territory-based, with relevant Commonwealth responsibilities generally addressing ‘nationally’ significant environmental, biodiversity, and water impacts through the Environment Protection and Biodiversity Conservation Act 1999.
- The Committee, while split on any unanimous recommendations (on largely ideological grounds), did recognise that it was “clear that there are improvements that can be made to current industry practice and the regulatory framework underpinning mine rehabilitation in this country“.
- A clear theme underpinning the recommendations made by each of the senators, across the political spectrum, was the necessity of more stringent and thorough observations about the status of all current and abandoned mine sites, as well as a potential for more unified or harmonised regulations on a national level – in recognition of the significant regulatory role that States and Territories play in regulating this area of industry.
- The Committee concluded:“Throughout this inquiry the committee has heard a wide range of evidence examining issues associated with the rehabilitation of former and current mining and resources projects in Australia, as well as power station ash dams. It is clear that there are issues of significant environmental and social concern arising from legacy mining sites in Australia, some of which the committee visited during its inquiry. It is also clear that there are improvements that can be made to current industry practice and the regulatory framework underpinning mine rehabilitation in this country.The committee has not, however, been able to reach agreement on a unanimous set of recommendations to guide the way forward for regulating the rehabilitation of mining and resources projects in Australia. As such, the views and proposed recommendations of committee members are presented separately in additional comments attached to this report.”
- A summary of the recommendations of each of the respective committee members (by political party) is set out below for your convenience.
Summary of committee member recommendations
Senator Duniam effectively argued that regulation of mine closure projects is best handled by the respective State or Territory governments and if harmonisation across States and Territories to achieve a national policy was to occur, it requires state and territory co-operation and is therefore best to occur via the COAG Energy Council.
He also cautioned that: “Proposals that potentially place a retrospective obligation upon existing resources operations put at risk the continuing operation of Australia’s resources sector.” And “imposing additional requirements on operations that have already undergone significant and rigorous approval processes without careful consideration, can create significant issues regarding sovereign risk to existing operating resources projects.”
Labor Senators recommend that as a part of the upcoming legislated review of the EPBC Act and/or Labor’s commitment to reforming environmental laws, the Commonwealth Government include in the consultation process the proposal to mandate that rehabilitation related conditions, as well as provisions regarding ‘care and maintenance’, must be applied to mining projects during consideration under the EPBC Act to ensure that approved mines have the lowest possible impact on matters of national environmental significance and to ensure approved mines are not left for extended periods of time in perpetual ‘care and maintenance’ while not being managed and monitored to avoid rehabilitation obligations.
Australian Greens recommendations:
The Australian Greens noted that it had “become clear that the status quo for mining rehabilitation policy has not worked, and that substantial Commonwealth intervention is needed to ensure that community expectations are met when it comes to protecting our environment and human health from the negative impacts of both abandoned and closing mine sites.”
With this in mind, the Greens prepared 32 separate recommendations, which, in summary, include:
- requiring the Commonwealth Government provide funding towards a complete national inventory of current and abandoned mine sites in Australia;
- requiring the Commonwealth Government develop a national policy on final landforms for mine site rehabilitation, covering issues including the use of open pit voids, out of pit waste dumps and above ground tailings storage facilities;
- requiring the Commonwealth Government introduce national regulations to mandate the submission of stand-alone closure plans as part of the mining lease approval process for all mining projects in Australia, in accordance with International Council on Mining and Metals;
- requiring the Commonwealth Government conduct a review of the potential value of alternate uses for existing abandoned mine sites (for example, as renewable energy generation sites), and what regulatory and practical measures can be taken by all levels of government to promote these alternate uses;
- amending the Corporations Act 2001 (Cth) and Commonwealth Accounting Standards, as necessary, be amended to ensure that mining companies account for and report on mine closure liabilities on a site by site basis. Site-specific information should be included in annual financial statements and as an individual line item in company balance sheets;
- requesting the Commonwealth Government work with state and territory governments to facilitate education and training initiatives in order to address skills gaps in the mine closure planning industry.
Centre Alliance recommendations:
Senator Rex Patrick, who was a casual vacancy to the inquiry, instigated the amendment of the terms of the inquiry to extend to contemplate power station ash dams after listening to constituents in Port Augusta suffering the effects of the closure of the Port Augusta Power Stations.
The Centre Alliance’s recommendations centred on the regulation and monitoring of fly ash dams, and the introduction of monitoring and rehabilitation requirements for ash dams generally – including mandating financial assurances (to be held by proprietors).
This article is the first in a series of insight articles to be published by our firm in the coming weeks about mine closure project delivery and risk management.