Reform Of Environmental Bonds System To Occur

Reform Of Environmental Bonds System To Occur

Western Australia Minister for Mines & Petroleum Norman Moore

Public Comment Sought For WA’s Mining Securities Reforms

Victor P Taffa

The State Government has taken steps towards fulfilling its commitment towards reform of the State’s Environmental Bonds Systems to ensure Mine Sites will always be adequately rehabilitated after closure.

Mines and Petroleum Minister Norman Moore announced today that a preliminary discussion paper outlining the options for Mining Securities in Western Australia had been released for Public Comment.

“Environmental Bonds from Mining Operators are required by Governments as a security to provide confidence to it and the community that satisfactory closure and rehabilitation of mine sites will always be achieved, and that industry will bear the cost.” Mr. Moore said.

“In cases where the operator is unable to meet those requirements, the Government can step in and use the securities to ensure appropriate rehabilitation does occur.”

“When Mining Securities, in the form of Environmental Bonds, were first introduced in WA during the late 1980s, the rates set were intended to provide sufficient funds to enable the Government to carry out rehabilitation work if the company was unable to do so.” Mr. Moore said.

“Mine Rehabilitation Standards and costs have changed and we need to ensure the mining security in place will be sufficient to meet current environmental standards.”

“The Bond amounts currently required of Mining Companies are generally well below the actual cost of rehabilitation, and the State Government is committed to establishing a system which will ensure mining securities cover Rehabilitation Costs.” Mr. Moore said.

The release of the preliminary discussion paper coincides with the expiry of a moratorium on Environmental Bond Rate Increases at the end of this month when staged increases in Bond Rates will recommence.

“The moratorium on bond rate increases which I announced in 2008 was required in response to the emergence of the global financial crisis.  That time is now past and it is important we refocus on ensuring adequate mining securities are in place in WA.” the Minister said.

Mr. Moore said the State Government would not delay the introduction of a Sustainable Mining Securities Policy.

“The Department of Mines and Petroleum has been researching a variety of mining securities models which are outlined in the discussion paper.” the Minister said.

“However, if these alternative models are not found to be workable, the State Government will retain the current environmental bonds system and continue to increase the bond amounts so that they fully cover the costs of a third party undertaking the rehabilitation.”

“Feedback on the discussion paper from industry and other relevant stakeholders is essential to ensure a robust mining securities policy is developed.”

“Implementing an efficient mining securities policy, which is expected to be finalised by mid-2011, is essential to continue responsible development of WA’s highly sought-after mineral resources.” Mr. Moore said.

The Public Comment Period for the Mining Securities Discussion Paper will close on February 15, 2011.

The Minister reassured industry that rate increases would not compromise the adoption of any alternative model resulting from the review.

The new Environmental Bond Rates takes effect from January 1, 2011.