CHAPTER 10 INTEGRATED MINE CLOSURE PLANNING IN THE FRAMEWORK OF SUSTAINABLE DEVELOPMENT

• Jurisdiction: United States

Mine Closure, Financial Assurance, and Final Reclamation
(Nov 2009)
CHAPTER 10
INTEGRATED MINE CLOSURE PLANNING IN THE FRAMEWORK OF SUSTAINABLE DEVELOPMENT
Luke J. Danielson
Marketa Zubkova
Sustainable Development Strategies Group
Gunnison, Colorado

Luke J. Danielson is a lawyer, professor and a principal in the Sustainable Development Strategies Group, a research organization based in Colorado, USA. He was for over eight years a member, and three times Chairman of the Colorado Mined Land Reclamation Board, the state agency that issues permits for mining. He was also a Trustee of the Colorado Abandoned Mined Land Trust, a government entity that finances and conducts reclamation and rehabilitation of abandoned mines. He led the multistakeholder process that developed Colorado's current mined land reclamation legislation in the wake of the Summitville Mine bankruptcy. Mr. Danielson has consulted to a number of governments on issues of rehabilitation of lands affected by mining, including Peru, Chile, and the Peoples Republic of China, and is author of major comparative studies of the reclamation legislation of the various U.S. states, and comparative studies of reclamation approaches in a variety of countries. He was the Director of the Mining Policy Research Initiative of the International Development Research Centre, and the Director of the Mining Minerals and Sustainable Development Project at the International Institute for Environment and Development.

Table of Contents

INTRODUCTION

I. MINES UNABLE TO CLOSE?

II. MINES AND DEVELOPMENT

III. CERRO DE PASCO, PERÚ

A. Community

1. Economic Activity

2. Daily Detonations

3. Plan L

4. Cerro de Pasco is inhabited but it is not livable

B. Mine (zinc, lead, and silver)

1. Production

C. Plan for closure

D. Conclusion

IV. OK TEDI MINE, PAPUA NEW GUINEA

A. Community

B. Mine (copper, gold)

Figure 11. Production. Targets and results. Source. Inmet Mining, Ok Tedi

C. Mine's impact on community

1. Ecological Impact

D. Mine Closure

1. Community Foundation

V. KONKOLA, ZAMBIA

A. Community

1. Malaria

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B. Mine (copper)

1. Konkola Copper Mines (KCM)

2. Konkola Mine

VI. EL CHINO, NEW MEXICO

A. Community

1. Santa Rita

2. Silver City

3. Hurley

B. Mine

C. Mine Closure

New Mexico Environmental and Reclamation Programs

VII. EL SALVADOR, CHILE

A. Community and the Mine Closure

B. Mine (copper, molybdenum)

1. Chañaral

C. Mine closure plan and prospects

1. Reconversion Project

VIII. CONCLUSIONS FROM THESE STUDIES

VIII. INTEGRATED CLOSURE PLANNING

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INTRODUCTION

Modern mine closure legislation began to be adopted in the United States, Canadian provinces, Australian states, and some European countries in the 1970s. It was a response to the rapid growth of environmental consciousness and resulting public demands for environmental protection. Prior to that time, there was significant concern over the effects of closure and abandonment- and occasional attempts to mitigate the most extreme impacts -but the first comprehensive mine closure legislation did not exist until the mid 1970s.

The focus of this legislation was largely environmental in character. In general, for new projects, it required that mining companies secure a permit before mining started. To get a permit, the company had to present a plan that described an acceptable end state for the mine workings at the end of their useful life. In that end state, the mine workings - pits, adits, shafts, waste dumps, and tailings - had to be physically and chemically stabilized to prevent significant migration offsite, control erosion, prevent blowing dust or water pollution, and otherwise protect offsite areas from ongoing damage. The site also needed to be secured from a public safety viewpoint: dangerous shafts had to be sealed, chemical reagents removed, etc.

Implementation of this legislation has been critical to the ability of the industry to operate. The industry has had quite enough problems with segments of the public who are resistant to its interests, and unwelcoming local communities. If the industry were not able to point to a thoughtful, rigorous, and guaranteed plan to reclaim at the end of the mine life, which would control the most obvious future environmental and safety hazards, the 'social license to operate' would be an order of magnitude harder to obtain.

The legislation reflects these goals. State legislation in the United States, for example, states purposes such as prevention of unnecessary and undue degradation of the environment,¹ to establish plant cover and stabilize the soil,² to minimize post-closure visual effects,³ to protect public health and safety,⁴ to

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prevent conditions detrimental to the general safety and welfare of the citizens of the state and to provide for the subsequent use of the lands affected,⁵ or to establish a self-sustaining ecosystem following closure.⁶ There are many formulations.⁷ A more recent one is:

"to assure that:

(a) Adverse environmental effects are prevented or minimized and that mined lands are reclaimed to a usable condition which is readily adaptable for alternative land uses.

(b) The production and conservation of minerals are encouraged, while giving consideration to values relating to recreation, watershed, wildlife, range and forage, and aesthetic enjoyment.

(c) Residual hazards to the public health and safety are eliminated."⁸

Some kind of plan was required under all these statutes to propose the detailed means for achieving these objectives.

Once the plan was approved, the company then had to post a financial guarantee, intended to ensure that if the company failed, or was unable or unwilling to implement the closure plan, government would have the resources to step in to stabilize and secure the site.

This is quite important in mining for several widely understood reasons:

o First, the impact of a poorly managed mine site can be quite serious, and the impacts can last a very long time. The can continue to get worse over time. If this impacts important resources (e.g. water resources), or poses imminent threats to public safety (tailings impoundment failures) it is hard to ignore.

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o Second, the cost of dealing with the worst sites can be enormous. It strains government even in the richest countries. In poorer countries, if the company doesn't reclaim the mine, chances are it will not be stabilized, because in many cases government simply does not have the money to do it.⁹

o Third, the industry is subject to serious price swings that can cause operations that are profitable today to be non-viable next week. The history of the industry is that many operations close and a considerable number of them fail financially when commodity prices cycle down.¹⁰ Therefore, it is frequently the case that there will be many simultaneous closures. If there has been no advance provision for this, it will surely be more than government can manage.

Modern mine closure legislation has accomplished a great deal where it has existed. It has slowed, if not entirely eliminated, additions to the world's legacy of abandoned and unreclaimed mine sites. While there have been some mistakes and missteps as government and industry learned to manage the process (and civil society organizations learned how to be more effective watchdogs of the system), on the whole the progress has been remarkable.

But the job of ensuring that all mines are properly reclaimed and closed is far from done. There are at least three major areas in which the system is not working, and where reconsideration is appropriate. These are:

o The mining industry has globalized, but this model of closure legislation has not. Administering such legislation well requires a degree of capacity not always present in governments, a degree of public pressure that is not always there, and money that is not always available. So while there are increasing closure requirements in many countries, they have not taken on all of the characteristics of the fully developed systems. Most strikingly, many of the closure systems in these countries do not have a system of financial guarantees, so when industry prices fall and companies fail (which happens fairly often in this risky industry), there may be no funds to

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implement closure. Companies in jurisdictions that require rigorous closure planning and financial assurance¹¹ are in direct economic competition with operations in places that have few or even no requirements.¹²

o Most of this legislation was based on a view which we now find to be overly optimistic in some cases: that we could always achieve a "walk away closure." This in turn allowed the government agency to declare victory, certify the site as reclaimed and - very important for the private sector - release the company from further legal liability. The reality is that there are more than a few projects where full implementation of the closure plan still leaves us with an ongoing need for monitoring, active management of stability, or measures such as operation of active water treatment plants for many years into the future, long after "closure" has occurred. Most of the current legislation does not deal with this adequately, nor does it answer the question of who is going to manage the site or pay the costs during the post closure period. The extent of the mining company's legal liability for site conditions also remains undetermined.

o Finally, as the minerals industry has come under increasing pressure to show concretely that it can deliver real and sustainable social and economic benefits to the communities and countries in which it does business, it is clear that we have not adequately considered the economic and social aspects of closure. The principal purpose of this paper is to contribute to that discussion.

This last issue is critical to the...