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Law Reform · Energy & Climate

Removal of Queensland's financial assurance provisions for mining

05 August, 2014

Despite the number of abandoned mines in Queensland, which the community is already paying to clean up, the Queensland Government is considering a model that removes the need for mining and CSG operators to provide security of 100% of the estimated cost of rehabilitation.

In 2012, the Queensland Commission of Audit estimated that the 15,000 abandoned mines across Queensland are a $1 billion liability on the state, and consequently the public. Currently, operators must demonstrate they are financially able to pay the costs of rehabilitating a mine site, which is often by way of a bank guarantee. 

The State Government is considering a ‘pooled fund’ model, whereby operators pay a small amount, of 0.5-2.5%, into a fund that is then used to clean up abandoned mines. For further information on the proposed model, visit the Department of Environment and Heritage Protection (EHP) website here.

In summary, EDO Qld’s main concerns with the proposed model are:

  1. There is a need for evidence-based reform, however no data is provided to substantiate the basis for reform;
  2. Removing financial assurance provisions in the Environmental Protection Act 1994 (Qld) could expose the State to additional risk;
  3. Any reform should be centred on minimising exposure risks for the State including incentivising progressive rehabilitation and mine closure planning;
  4. The Northern Territory model that combines a pooled fund to address existing liability, and a 100% financial assurance to address future liability, has not been adequately explored and aspects of the Western Australian model have been overlooked;
  5. Calculation of risk, threshold limits and contribution rates are unsubstantiated and any ceiling limit should be 100% of the State’s potential liability;
  6. Governance, administration of the fund needs to be transparent and met with appropriate monitoring and enforcement; and
  7. The Abandoned Mines Lands Program requires transparent reporting and there should be a financial audit of the State’s liability for all mines that are abandoned or in ‘care and maintenance’.

Environmental Defenders Office Queensland (EDO Qld) gives a strong legal voice to the environment when needed most.

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