Economic and financial aspects of mine closure

Today, mine reclamation is a key component to a successful mine plan. Most of the industrialized nations have recognized the need to make mining activities relatively environmentally friendly, if they want to continue to benefit from the economic gains from mineral resource development. Countries such as the United States, Canada, Australia and South Africa are leaders in the field and have implemented relatively sophisticated legislation to ensure environmentally correct mine closure. These countries rely on a combination of strict control strategies and economic penalties to ensure compliance. Yet, from the firm's perspective, reclamation activities are counterproductive as they cut into profits. In order to attract economic development and earn much needed economic capital, most of the rest of the world, particularly the developing countries, lack effective mine closure legislation. The traditional command and control type of legislation that is sometimes used is either vague and therefore avoided, or not enforced appropriately, resulting in an undesirable level of environmental degradation. With the use of case studies from Brazil, this article shows that direct controls are effective in some instances and not in others. It proposes that economic and financial tools may be more effective than the traditional direct controls in getting firms to comply with environmental standards, particularly in developing countries where environmental compliance is more difficult to achieve. It explains the use of performance bonding as one type of economic incentive that has proven to be an effective environmental policy in mine planning and closure. The authors additionally push beyond the typical style of performance bonds to introduce a flexible bonding and insurance system that allows governments to maintain strict environmental standards but limits firms financial exposure during the mining process. Such a system learns from the successes of the industrialized countries that use performance bonding and is sensitive to the needs of developing nations to attract investment yet maintain environmental integrity.     

Mine closure legislation in Indonesia: The role of mineral industry involvement

Major mining companies have recently embraced the sustainable development paradigm, in seeking to improve their competitiveness and increase shareholder returns. Successful mine closure is one important element of this process. Improved performance in this area is essential if surrounding communities are to see mining companies as responsible corporate and social partners.
In Indonesia, the new approach has coincided with the development of specific mine closure legislation. To facilitate the legislation, a consortium of mining companies joined to form the Industry Mine Closure Steering Committee. This Committee has lobbied the Government, actively negotiating to incorporate sustainable development ideals and practices into the new legislation. The Committee's aim has been to foster continued development of the mining industry, while taking account of variation in environmental, social and community conditions. In describing the process, this article seeks to provide guidance for the development of mine closure legislation in other nations.     

Mining with communities

To be considered as sustainable, a mining community needs to adhere to the principles of ecological sustainability, economic vitality and social equity. These principles apply over a long time span, covering both the life of the mine and post-mining closure. The legacy left by a mine to the community after its closure is emerging as a significant aspect of its planning. Progress towards sustainability is made when value is added to a community with respect to these principles by the mining operation during its life cycle. This article presents a series of cases to demonstrate the diverse potential challenges to achieving a sustainable mining community. These case studies of both new and old mining communities are drawn mainly from Canada and from locations abroad where Canadian companies are now building mines. The article concludes by considering various approaches that can foster sustainable mining communities and the role of community consultation and capacity building.     

Sustainable development in the mining industry: clarifying the corporate perspective

This paper examines sustainable development in the corporate mining context, and provides some guidelines for mining companies seeking to operate more sustainably. There is now a burgeoning literature that examines sustainable development in the context of minerals and mining, most of which is concerned with sustainability at global and national scales. What is often challenging to ascertain, however, from these numerous perspectives on sustainable mineral extraction, minerals and metals recycling, environmental management, and social performance, is how sustainable development applies to mining companies themselves, and what steps a mine must take in order to improve the sustainability of operations. Since mining processes have the potential to impact a diverse group of environmental entities, and are of interest to a wide range of stakeholder groups, there is ample opportunity for the industry to operate more sustainably. Specifically, with improved planning, implementation of sound environmental management tools and cleaner technologies, extended social responsibility to stakeholder groups, the formation of sustainability partnerships, and improved training, a mine can improve performance in both the environmental and socioeconomic arenas, and thus contribute enormously to sustainable development at the mine level.     

Transforming open mining pits into fish farms: Moving towards sustainability

The legacy of mining activities has typically been land ‘returned to wildlife’, or, at some sites, degraded to such an extent that it is unsuitable for any alternate use. Progress towards sustainability is made when value is added in terms of the ecological, social and economic well‐being of the community. In keeping with the principles of sustainable development, the innovative use of flooded open pits and tailings impoundments as commercial, recreational or ornamental fish farms should be considered in some locations, as it could make a significant contribution to the social equity, economic vitality and environmental integrity of mining communities. This article highlights the growing significance of aquaculture and explores the benefits and barriers to transforming flooded pits and impoundments into aquaculture operations. Among other benefits, aquaculture may provide a much‐needed source of revenue, employment and, in some cases, food to communities impacted by mine closure. Further, aquaculture in a controlled closed environment may be more acceptable to critics of fish farming who are concerned about fish escapes and viral transmissions to wild populations. Despite the potential benefits, aquaculture in flooded pits and impoundments is not without its complications — it requires a site‐specific design approach that must consider issues ranging from metals uptake by fish, to the long‐term viability of the aquatic system as fish habitat, to the overall contribution of aquaculture to sustainability.     

Environmental regulation of exploration and mining operations in Asian countries

This paper offers a new perspective on the environmental laws in Asian nations affecting the exploration, mining, and reclamation activities of the mineral resource industry: the perspective of the senior government officials in those countries, whose job is to enforce these new environmental laws. The article presents the results of a 1998 survey of national environmental officials in Asia conducted by the Colorado School of Mines and the Metal Mining Agency of Japan. Officials in 10 diverse countries—Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Mongolia, Philippines, Thailand and Vietnam—responded to a detailed questionnaire covering applicable laws, agencies, protected areas, covered mineral activities, financial assurance, environmental impact assessment, public involvement, environmental standards, permit and reclamation requirements.
The survey confirms that Asian nations are part of the global trend towards national government regulatory structures that balance mineral development objectives with environmental considerations. The survey also shows developing regulatory systems (some embryonic, some more mature) utilizing a combination of mining and environmental acts, and often an 'insider' perspective of the national officials administering the laws. While that perspective is not without its biases (not least the rigor of enforcement), it may nevertheless be of use in company planning. The emerging regulatory picture contradicts the conventional notion that it is the 'lower' level of regulation in Asia that is attracting foreign direct investment in mining.     

Social disruption,mine closure and housing policy: evidence from the Free State Goldfields,South Africa

The creation of mine settlements became a common practice between 1950 and 1980. These mining towns were seen as places of permanent settlement. This permanency, together with the privatisation of mine‐owned houses (mid‐1980s) increased place attachment. Mine decline thus brought with it some form of social disruption. Whereas mining companies in Australia have attempted to minimise the social disruption caused by mine closure by introducing fly‐in‐fly‐out arrangements, the post‐apartheid housing policy in South Africa has focused on asset building in mining areas. We completed 180 interviews with representatives of households. The survey formed part of a panel survey and further included a control group and 15 qualitative interviews. Our results indicate that though members of the mining community have housing units that are larger than those of the control group, incomes are lower in the mining community, real income is in decline, smaller numbers of household members are contributing to income, self‐assessments of wealth are characterised by lower ratings, household assets increase at a slower pace, and there is a stronger preference to continue to reside in the area. All of the above serves to illustrate the consequences of the asset‐based strategies embedded in South African housing policy. The social disruption associated with mine closure further tends to lock households into locations, and thus inhibits mobility.     

Environmental management of small-scale and artisanal mining: the Portovelo-Zaruma goldmining area,southern Ecuador

This paper considers technical measures and policy initiatives needed to improve environmental management in the Portovelo-Zaruma mining district of southern Ecuador. In this area, gold is mined by a large number of small-scale and artisanal operators, and discharges of cyanide and metal-laden tailings have had a severe impact on the shared Ecuadorian-Peruvian Puyango river system. It is shown to be technically possible to confine mining waste and tailings at a reasonable cost. However, the complex topography of the mining district forces tailings management to be communal, where all operators are connected to one central tailings impoundment. This, in turn, implies two things: (i) that a large number of operators must agree to pool resources to bring such a facility into reality; and (ii) that miners must move away from rudimentary operations that survive on a day-to-day basis, towards bigger, mechanized and longer-term sustainable operations that are based on proven ore reserves. It is deemed unlikely that existing environmental regulations and the provision of technical solutions will be sufficient to resolve the environmental problems. Important impediments relate to the limited financial resources available to each individual miner and the problems of pooling these resources, and to the fact that the main impacts of pollution are suffered downstream of the mining district and, hence, do not affect the miners themselves. Three policy measures are therefore suggested. First, the enforcement of existing regulations must be improved, and this may be achieved by the strengthening of the central authority charged with supervision and control of mining activities. Second, local government involvement and local public participation in environmental management needs to be promoted. Third, a clear policy should be defined which promotes the reorganisation of small operations into larger units that are strong enough to sustain rational exploration and environmental obligations. The case study suggests that mining policy in lesser-developed countries should develop to enable small-scale and artisanal miners to form entities that are of a sufficiently large scale to allow adequate and cost-effective environmental protection.     

A regional environmental information system for analyzing and predicting the impacts of nonferrous mining on an agricultural environment

Mineral exploitation is a necessary component of China's economic development goals. Such exploitation brings with it the potential for serious environmental degradation. Careful environmental impact assessments of mining projects are required in order to implement China's environmental protection law and identify measures for protecting surrounding agricultural environments. This article describes an environmental information system that has been developed for the purpose of assisting with the environmental impact assessment of nonferrous mining operations with a particular focus on agricultural impacts. An application of the environmental information system to the Yongping copper mine, located in Jiangxi Province, is discussed. The role of the environmental information system is analyzing and predicting soil contamination from heavy metals and other types of impacts from this mining operation is described. The environmental information system is designed for implementation on an IBM PC/XT microcomputer. The experience gained from the Yongping copper mine application and the growing popularity of microcomputers in China indicate a significant potential for the effective use of a microcomputer-based environmental information system in other parts of China.     

Land Use-Based Landscape Planning and Restoration in Mine Closure Areas

Landscape planning and restoration in mine closure areas is not only an inevitable choice to sustain mining areas but also an important path to maximize landscape resources and to improve ecological function in mine closure areas. The analysis of the present mine development shows that many mines are unavoidably facing closures in China. This paper analyzes the periodic impact of mining activities on landscapes and then proposes planning concepts and principles. According to the landscape characteristics in mine closure areas, this paper classifies available landscape resources in mine closure areas into the landscape for restoration, for limited restoration and for protection, and then summarizes directions for their uses. This paper establishes the framework of spatial control planning and design of landscape elements from “macro control, medium allocation and micro optimization” for the purpose of managing and using this kind of special landscape resources. Finally, this paper applies the theories and methods to a case study in Wu’an from two aspects: the construction of a sustainable land-use pattern on a large scale and the optimized allocation of typical mine landscape resources on a small scale.     

Environmental regulatory failure and metal contamination at the Giap Lai pyrite mine, Northern Vietnam

The causes for the failure in enforcement of environmental regulations at the Giap Lai pyrite mine in northern Vietnam are considered and the environmental impacts that are associated with this mine are evaluated. It is shown that sulphide-rich tailings and waste rock in the mining area represent significant sources of acid rock drainage (ARD). The ARD is causing elevated metal levels in downstream water bodies, which in turn, represent a threat to both human health and to aquatic ecosystems. Metal concentrations in impacted surface waters have increased after mine closure, suggesting that impacts are becoming progressively more serious. No post-closure, remediation measures have been applied at the mine, in spite of the existence of environmental legislation and both central and regional institutions charged with environmental supervision and control. The research presented here provides further emphasis for the recommendation that, while government institutions may need to be strengthened, and environmental regulations need to be in place, true on the ground improvement in environmental quality in Vietnam and in many other developing countries require an increased focus on promoting public awareness of industrial environmental issues.     

Public preferences for timeliness and quality of mine site rehabilitation. The case of bauxite mining in Western Australia

Government departments that regulate environmental management for mining have a range of choices about the timing and quality of rehabilitation. Economic theory suggests that the cost incurred by firms should relate to the social cost of the environmental damage, however, there has been little work done on non-market values for mine rehabilitation. This study uses choice modelling to assess these issues for bauxite mining in state owned native forest in south-west Australia. The results show that the public place a relatively high value on the re-creation of vertebrate habitat and would prefer in situ mine rehabilitation over environmental offsets. Alcoa's current rehabilitation practices appear to be supported by the preferences revealed in this study.     

Perspectives on community health issues and the mining boom-bust cycle

The health of mining communities is becoming a priority for the mining industry, governments, and researchers. This paper describes an exploratory qualitative study into community health issues and mining activities (associated with the mining boom-bust cycle) from the perspective of health and social service providers in the northern Canadian coal mining community of Tumbler Ridge, British Columbia. Health and social service providers report on increases in pregnancies, sexually transmitted infections, and mine related injuries during booming mine activities. During bust times, mental health issues such as depression and anxiety were reported. Overarching community health issues prominent during both boom and bust periods include burdens to health and social services, family stress, violence towards women, and addiction issues. This paper concludes by providing recommendations as to how the industry can enhance community health made by this important stakeholder group.     

Abandoned artisanal gold mines in the Brazilian Amazon: A legacy of mercury pollution

The modern gold rush in the Brazilian Amazon attracted millions of people to become artisanal miners in order to escape complete social marginalization. The rudimentary nature of artisanal mining activities often generates a legacy of extensive environmental degradation,both during operations and well after mining activities have ceased. One of the most significant environmental impacts is derived from the use of mercury (Hg), which is illegal for use in gold amalgamation in Brazil, but continues to be the preferred method employed by artisanal gold miners. The general population is unaware of the capricious nature of mercury and artisanal mining activities. Moreover, individuals in positions of political or economic infiuence tend to be negatively biased towards artisanal mining and government policies do not effectively address the realities of these activities. Affected communities have consequently been ignored,and mistrust towards outside parties is high. Not surprisingly, miners are suspicious of and unlikely to employ externally derived solutions to reduce mercury emissions. This article reviews the use of mercury in artisanal mining and highlights the role miners, governments and non-governmental organizations (NGOs) have played in communicating facts, perpetuating myths and deriving solutions for mercury pollution. This article also raises some key concerns that must be addressed to understand the behaviour of mercury in the environment and identifies solutions for problems facing communities where artisanal gold mining operations have been abandoned.     

Assessing the impact of driverless haul trucks in Australian surface mining

Australia has been a leading mining nation and its mines continue to attract substantial investment due to its strong mineral endowment, mining tradition and high skills base. In recent years Australian mining companies have been facing higher labour costs, which need to be offset by other savings. Automating mine-site machinery offers one potential source of such savings.Underground mines pioneered automated technology largely for safety and mine accessibility reasons and to reduce operating costs. Yet these operations now represent a much smaller portion of the total ore tonnes mined due to the changing mining techniques meaning larger lower grade deposits are becoming economic. It appears the future of mine automation will be directed by surface mining as this maturing technology finds further applications above ground and in the next decade large scale open pit automation trials gain more momentum.This paper assesses the implications of introducing driverless haul trucks in a typical large remote Australian open-pit mine. Such automation will save employee and associated costs, increase operational productive hours and ultimately will reduce mine site workforce numbers. While there will be fewer jobs per mine, with reduced costs and higher productivity some previously uneconomic mines may again be profitable.The social implications of greater mine site automation are the reduction in population of remote mining towns and a decrease in the lower skilled labour requirements for the mining sector. There will be an increase in fly-in fly-out mining operations and companies will establish remote control centres for automated mines in larger cities. This may decrease overall labour requirements and so reduce employment in the sector; therefore, the government should be mindful of implementing policies that ensure a fair return on the economic rent of mineral leases.     

An application of the Krutilla — fisher model to appraising the benefits of green belt preservation versus site development

Financial returns can be deceptive as criteria upon which to make public decisions where outputs from proposed developments are subsidized, such as housing, or protected from imports, such as opencast coal mining. Removing subsidies and the effects of import restrictions suggests that the social benefits from these developments are much less than the financial benefits. Including externalities from the proposed developments on neighbouring householders, and preservation benefits from green belt land, estimated by contingent valuation methods, reveals that the social benefits from opencast coal mining are actually negative.     

Performance assessment of mining operations using nonparametric production analysis: A bootstrapping approach in DEA

This paper presents a Data Envelopment Analysis (DEA) model combined with bootstrapping to assess performance in mining operations. Since DEA-type indicators based on nonparametric production analysis are simply point estimates without any standard error, we provide a methodology to assess the performance of strip mining operations by means of a DEA bootstrapping approach. This methodology is applied to a sample of fifteen Illinois strip coal mines using publicly available data (Thompson et al., 1995). The applied approach uses a mixed mine environmental performance indicator (MMEPI) that is derived by means of a VRS DEA environmental technology treating overburden as an undesirable output under the weak disposability assumption, and we compare this measure with a traditional output-oriented mine performance indicator (MPI) omitting overburden. Although omitting undesirable output results in biased performance estimates, these findings are based on sample specific results and indicate this bias is not statistically significant. The confidence intervals derived by the bootstrapping of the proposed MMEPI point estimates indicate that significant inefficiency has taken place in the analyzed sample of Illinois strip mines.     

Hydrologic Effects of Surface Coal Mining in Appalachia (U.S.)

Surface coal mining operations alter landscapes of the Appalachian Mountains, United States, by replacing bedrock with mine spoil, altering topography, removing native vegetation, and constructing mine soils with hydrologic properties that differ from those of native soils. Research has demonstrated hydrologic effects of mining and reclamation on Appalachian landscapes include increased peakflows at newly mined and reclaimed watersheds in response to strong storm events, increased subsurface void space, and increased base flows. We review these investigations with a focus on identifying changes to hydrologic flow paths caused by surface mining for coal in the Appalachian Mountains. We introduce two conceptual control points that govern hydrologic flow paths on mined lands, including the soil surface that partitions infiltration vs. surface runoff and a potential subsurface zone that partitions subsurface storm flow vs. deeper percolation. Investigations to improve knowledge of hydrologic pathways on reclaimed Appalachian mine sites are needed to identify effects of mining on hydrologic processes, aid development of reclamation methods to reduce hydrologic impacts, and direct environmental mitigation and public policy.     

Environmental and human exposure assessment monitoring of communities near an abandoned mercury mine in the Philippines: a toxic legacy

Abandoned mines are an important global concern and continue to pose real or potential threats to human safety and health including environmental damage/s. Very few countries had government mine regulation and reclamation policies until the latter part of the century where legal, financial and technical procedures were required for existing mining operations. Major reasons for mine closure may be mainly due to poor economies of the commodity making mining unprofitable, technical difficulties and national security. If the mine is abandoned, more often than not it is the government that shoulders the burden of clean-up, monitoring and remediation. The topic of abandoned mines is complex because of the associated financial and legal liability implications. Abandoned mercury mines have been identified as one of the major concerns because of their significant long-term environmental problems. Primary mercury production is still ongoing in Spain, Kyrgzystan, China, Algeria, Russia and Slovakia while world production declined substantially in the late 1980s. In the Philippines, the mercury mine located southeast of Manila was in operation from 1955 to 1976, before ceasing operation because of the decline in world market price for the commodity. During this time, annual production of mercury was estimated to be about 140,000 kg of mercury yearly. Approximately 2,000,000 t of mine-waste calcines (retorted ore) were produced during mining and roughly 1,000,000 t of these calcines were dumped into nearby Honda Bay to construct a jetty to facilitate mine operations where about 2000 people reside in the nearby three barangays. In October, 1994 the Department of Health received a request from the Provincial Health Office for technical assistance relative to the investigation of increasing complaints of unusual symptoms (e.g. miscarriages, tooth loss, muscle weakness, paralysis, anemia, tremors, etc.) among residents of three barangays. Initial health reports revealed significant elevation of blood mercury levels exceeding the then recommended exposure level of 20ppb in 12 out of the 43 (27.9%) residents examined. The majority of the volunteers were former mine workers. In this study the abnormal findings included gingivitis, mercury lines, gum bleeding and pterydium. The most common neurologic complaints were numbness, weakness, tremors and incoordination. Anemia and elevated liver function tests were also seen in a majority of those examined. The assessment also revealed a probable association between blood mercury level and eosinophilia. The same association was also seen between high mercury levels and the presence of tremors and working in the mercury mine. To date, there are very limited environmental and health studies on the impact of both total and methylmercury that have been undertaken in the Philippines. Thus, this area of study was selected primarily because of its importance as an emerging issue in the country, especially regarding the combined effects of total and methylmercury low-dose and continuous uptake from environmental sources. At present the effects of total mercury exposure combined with MeHg consumption remain an important issue, especially those of low-dose and continuous uptake. Results of the study showed that four (4) species of fish, namely ibis, tabas, lapu-lapu and torsillo, had exceeded the recommended total mercury and methylmercury levels in fish (NV>0.5 microg/gf.w., NV>0.3 microg/gf.w., respectively). Saging and kanuping also exceeded the permissible levels for methylmercury. Total and methylmercury in canned fish, and total mercury in rice, ambient air and drinking water were within the recommended levels, however, additional mercury load from these sources may contribute to the over-all body burden of mercury among residents in the area. Surface water quality at the mining area, Honda Bay and during some monitoring periods at Palawan Bay exceeded total mercury standards (NV>0.002 ng/mL). Soil samples in two sites, namely Tagburos and Honda Bay, exceeded the EPA Region 9 Primary Remediation Goal recommended values for total mercury for residential purposes (NV>23 mg/kg). The hand to mouth activity among infants and children is another significant route for mercury exposure. Statistically significant results were obtained for infants when comparing the results after one year of monitoring for methylmercury levels in hair for both exposed and control sub-groups. Likewise, comparing the initial and final hair methylmercury levels among pregnant women/mothers in the exposed group showed statistically significant (p<0.05) results. Comparing the exposed and control sub-groups' mercury hair levels per sub-group showed statistically significant results among the following: (a) initial and final total mercury hair levels among children, (b) initial and final methylmercury hair levels among children, (c) final total mercury hair levels among pregnant women, (d) initial and final total mercury hair levels among mothers, and (e) initial and final methyl hair levels among mothers.     

Responding to Pressure on Local Natural Resources: the Story of Three Villages in South-Eastern Nigeria

There has been a recent move by development professionals away from formal “scientific” attempts to address problems caused by changing environmental conditions, towards a greater reliance on the innovative ability and indigenous knowledge of local people. This has necessitated a greater understanding of the way in which communities respond to environmental and socio-economic change. Using a model that predicts community responses to pressure on local natural resources, and data collected in three villages in south-eastern Nigeria, an attempt is made to document the way in which people react and adapt to change. It is concluded that with sufficient time communities will usually develop new resource management and agricultural systems. However, where change is occurring rapidly, a facilitator is required to encourage and accelerate local innovation so that farming and natural resource management systems can be appropriately adjusted before severe environmental degradation takes place.