Queensland Government to introduce new Financial Assurance framework and progressive rehabilitation requirements – are you ready?

5 April 2018
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In February 2018, following various reviews and extensive consultation, the Queensland Government introduced the Minerals and Energy Resources (Financial Provisioning) Bill 2018. The Bill provides for significant changes to the financial assurances framework and amendment to the Environmental Protection Act (EP Act) to implement rehabilitation reforms including progressive rehabilitation and closure plans. Recent cases of resource companies unable to complete their rehabilitation activities have highlighted to the Government issues with the financial assurance framework.

Who is impacted?

All environmental authority (EA) holders for resource activities (which includes mines and petroleum and gas operations) in Queensland will be impacted.

What are the key changes?

The Bill replaces the current financial assurance requirements for resource activities under the EP Act with a financial provisioning scheme, including a new scheme fund and revised surety arrangements. Financial assurance may be provided by payment of an annual contribution to the scheme fund or the giving of a surety, which has been extended to also include insurance bonds. The financial provisioning scheme incorporates risk management principles – the Scheme Manager allocates resource activities to a risk category based on a range of parameters.

The second key pillar is the introduction of a requirement for all mines to develop a progressive rehabilitation and closure plan (PCR Plan) as part of their site-specific environmental authority. The Bill contemplates milestones for progressive rehabilitation of mined areas against the PRC Plan and includes regular monitoring, assessment and reporting combined with new offence provisions and enforcement protocols.

Best practice mining acknowledges that mining companies take responsibility for carrying out their mining obligations; plan for and achieve good rehabilitation outcomes; and make sufficient financial provisions to enable quality progressive and final rehabilitation to occur.

Timing

The Queensland Government is expecting the reforms to be enacted mid-2018. It is expected that the new financial assurance framework will commence through transition provisions. The progressive rehabilitation and closure requirements will commence in July 2019.
Are you prepared for the changes?

Need assistance ……contact Xenith

Xenith Consulting provides a diverse range of services related to mine design and planning for operating and proposed mines incorporating final landform design, rehabilitation planning and mine closure planning in life of mine plans. Our expertise and experience in NSW in life of mine rehabilitation and mine closure planning is highly regarded.

Xenith can assist you in:

  • better understanding the technical aspects of the new legislation;
  • preparing submissions to the Scheme Manager regarding the initial (and annual) risk category allocation – this is aimed at leading to a lower risk allocation and lower contribution to the scheme fund;
  • develop mine closure options with particular focus on the final void; and
  • prepare life of mine plans incorporating progressive rehabilitation, milestones and mine closure plans.

Should you require assistance, please contact one of the Brisbane Consulting Managers at Xenith.