Financial assurance and mine closure: Stakeholder expectations and effects on operating decisions

Financial assurance is increasingly seen as a means to ensure orderly, clean and lasting closure of mines. Broadly interpreted, “closure” requires leaving viable ecosystems on mining lands that are compatible with a healthy environment and with human activities, that have low hazard, and that encompass measures to prevent ongoing pollution from the site in the long-term. Financial assurance encompasses environmental surety instruments that protect the government and public in the event a mining company cannot meet its reclamation or rehabilitation obligations. As such, financial assurance is in essence the money available for closure of the mine in the case when the mine owner is not available to perform the work. A general trend towards greater environmental concern among social stakeholders in mining further serves to focus attention on policies and practices that can actually “assure” financial assurance.Financial assurance is also perceived as a means to address closure-related challenges that are increasing in number as well as diversity. Notably, current trends involve a shift towards a greater focus to the societal aspects of mine closure rather than just the ecological. The use of financial assurance, however, also raises some fundamental questions about how assurance mechanisms influence mining operations and the relationship between mining operations and their surroundings. This paper examines both the internal effect of a variety of financial assurance approaches on mining operations—in particular the manner in which environmental and social concerns are addressed by mining firms, and the almost inevitable tension between some form of financial provision for closure on the one hand, and governmental expectations of tax revenue on the other. As a major argument for supporting the conduct of mining is that state revenues from the extractive industries supply monies for the building of human and infrastructural capital, this second area of tension also has strong social and developmental overtones.     

Resources policy and mine closure in South Africa: The case of the Free State Goldfields

There is increasing international pressure to ensure that mining development is aligned with local and national development objectives. In South Africa, legislation requires mining companies to produce Social and Labour Plans, which are aimed at addressing local developmental concerns. Against the background of the new mining legislation in South Africa, this paper evaluates attempts to address mine downscaling in the Free State Goldfields over the past two decades. The analysis shows that despite an improved legislative environment, the outcomes in respect of integrated planning are disappointing, owing mainly to a lack of trust and government incapacity to enact the new legislation. It is argued that legislative changes and a national response in respect of mine downscaling are required.     

The law and economics of reclamation bonds

It is becoming a standard practice for governments to require mining operations to post reclamation bonds. Yet, there have been few theoretical treatments examining the rationale for bonding mechanisms, and even fewer empirical treatments of the effectiveness of bonding. This paper addresses some of these holes in the literature. It begins by examining the rationale underlying reclamation bonds, and discusses the strengths and weaknesses of bonding as a tool for enforcing reclamation requirements. The role of bonding mechanisms is to help enforce standards, not necessarily yield efficient outcomes, and these mechanisms are best viewed as a complement to — not a substitute for — liability rules. The paper also examines the effectiveness of bonding by drawing on evidence from hardrock mining on public lands in the western United States.     

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.     

Optimal hardwood tree planting and forest reclamation policy on reclaimed surface mine lands in the Appalachian coal region

We study the optimal hardwood tree planting decision on reclaimed surface coal mines in the Appalachian region using a mine operator-focused, expected cost model that recognizes costs of preparing the site for tree planting, unit costs of planting seedlings, and opportunity costs of reforestation treatments and the performance bond. We also consider the possibility of failed initial attempts by incorporating the probability of reforestation success, based on empirical seedling ,survival rates and regulated tree survival standards, as well as fixed and unit costs of returning for additional planting. Optimal planting levels from 319 to 780 trees per acre and expected costs from $1049 to $2338 were found using simulations over a range of unit planting costs, fixed costs of replanting, tree survival standards, and interest rates. Further simulations compared optimal planting across un-weathered gray sandstone and weathered brown sandstone substrate materials, finding gray sandstone to be associated with lower expected costs. We conclude that optimal planting density and expected reforestation cost are sensitive to economic parameters, regulations, and planting substrate materials; and those policies influencing these factors may have substantial impact on reforestation outcomes and the choice of post-mining land use by mine operators. Our study provides a framework for understanding forest reclamation decisions that incorporates incentives faced by the mine operators who develop and implement the plans for mine reclamation, including forestry.     

Contemporary Western Rural USA Economic Composition: Potential Implications for Environmental Policy and Research

/ The rural West of the United States is considered strongly antienvironment. The traditional economic reliance of the area on natural resources has long explained this antienvironment stance. The region consistently elects federal officials who as a group consistently vote against environmental bills and seek to undo existing federal environmental regulation. These politicians defend their antienvironment actions based on their perception of the economic composition and interests of the region. Recent studies, however, have suggested that rural residents are increasingly concerned about environmental issues. These studies, however, lack a consistent theoretical basis. This article uses an alternative economic typing system to examine the economic composition of rural Idaho and suggests that the results found using the alternative typing system might provide a theoretical basis to explain why some studies are finding increased rural environmental support. The results show that rural Idaho is much more economically diverse using this alternative typing methodology compared to the outcomes of traditional USDA economic methodologies. The policy and research implications of these findings are examined.KEY WORDS: Rural; Environmental policy; Economic composition     

Economic and financial analysis on rainwater harvesting for agricultural irrigation in the rural areas of Beijing

Since 2006, around 600 rainwater harvesting systems have been constructed for agricultural irrigation in Beijing. The financial and economic implications of using these systems are discussed less. It is important to understand the effectiveness of the investments spent on the rainwater harvesting systems. The paper aims to analyze economic and financial performance of the constructed rainwater harvesting systems in rural areas of Beijing through the method of cost benefit analysis. The economic analysis focuses on determining the contribution of rainwater harvesting systems to the development of society, carried out from the point of view of government. The financial analysis allows comparison of the financial implications of using groundwater with using rainwater for agricultural irrigation from the point of view of individual participant, namely the local farmers. The results show that the rainwater harvesting systems are economically feasible. This means rainwater harvesting have positive effects for society. However, the financial feasibility of rainwater harvesting systems depends on the charge for groundwater and on the size of the rainwater harvesting systems. If groundwater is not charged, the rainwater harvesting systems are not financially feasible. If groundwater is charged at 2 Yuan/m³, only large size systems are financially feasible while small and middle sizes systems are not financially feasible. Under these circumstances, only large systems can run smoothly, while farmers may not use the small and medium-size systems.     

A human ecological assessment of air quality management: A convergence in economic and ecological thinking?

Traditional air pollution management practices are examined using the human ecological framework adopted by Boyden and others (1981) in their study of Hong Kong—the biohistorical or biosocial approach. The subsequent analysis of current air quality management practices assesses their effectiveness in protecting the overall health of both humans and the natural environment. The uncertainties inherent in air pollution management practices which emerge highlight the need to reduce emissions rather than rely on scientific knowledge to define clean air. The assessment also clearly defines roles for research in various areas such as atmospheric models, health effects, and environmental damage. The final recommendations emphasize the need for the introduction of such incentives to reduce emissions as economic instruments and warn against using health information to define clean air. Health and environmental damage information can, however, be used in risk assessment strategies together with atmospheric dispersion models.     

环境税的理论与实践

环境税是保护环境的有效经济手段。本文首先对环境税的基本理论进行了分析,在此基础上,对我国环境税现状及发展前景进行了探讨。     

Economic and policy instrument analyses in support of the scrap tire recycling program in Taiwan

Understanding the cost-effectiveness and the role of economic and policy instruments, such as the combined product tax-recycling subsidy scheme or a tradable permit, for scrap tire recycling has been of crucial importance in a market-oriented environmental management system. Promoting product (tire) stewardship on one hand and improving incentive-based recycling policy on the other hand requires a comprehensive analysis of the interfaces and interactions in the nexus of economic impacts, environmental management, environmental valuation, and cost-benefit analysis. This paper presents an assessment of the interfaces and interactions between the implementation of policy instruments and its associated economic evaluation for sustaining a scrap tire recycling program in Taiwan during the era of the strong economic growth of the late 1990s. It begins with an introduction of the management of the co-evolution between technology metrics of scrap tire recycling and organizational changes for meeting the managerial goals island-wide during the 1990s. The database collected and used for such analysis covers 17 major tire recycling firms and 10 major tire manufacturers at that time. With estimates of scrap tire generation and possible scale of subsidy with respect to differing tire recycling technologies applied, economic analysis eventually leads to identify the associated levels of product tax with respect to various sizes of new tires. It particularly demonstrates a broad perspective of how an integrated econometric and engineering economic analysis can be conducted to assist in implementing policy instruments for scrap tire management. Research findings indicate that different subsidy settings for collection, processing, and end use of scrap tires should be configured to ameliorate the overall managerial effectiveness. Removing the existing boundaries between designated service districts could strengthen the competitiveness of scrap tires recycling industry, helping to reduce the required levels of product tax and subsidy. With such initial breakthroughs at hand to handle the complexity of scrap tire recycling technologies, there remains unique management and policy avenues left to explore if a multi-dimensional solution is to be successful in the long run.     

Abandoned mine shafts and levels in the British coalfields

Industrial dereliction is a concern to all societies. In the United Kingdom the British government is trying to make its abandoned coalfields more attractive to new industry through a combination of land reclamation and job incentive programs. The most ambitious of these projects occurs in the South Wales Coalfield, which records 200 years of land defilement and the highest unemployment amplitudes in mainland Britain. In returning this area to a semblance of its previous state, problems arise over how best to fill and cap the many derelict pit shafts and abandoned shallow mines that riddle this region. This analysis reports on the methods of treatment used to achieve this end, along with the procedures used to minimize ground subsidence, water pollution, noxious gas emission, and the potential for physical injury. These environmental controls have application to the United States and Western Europe, where pockets of industrial blight are also symptomatic of a troubled local economy.     

Environmental management and firm performance: a case study

This study has as its aim to help to clarify the relationship between environmental management and economic performance by integrating it into a wider framework that includes the relationship between environmental strategy and firm performance, the latter being understood as the combination of environmental performance, competitive advantage and economic performance. A case study of the COATO farming cooperative showed us that its environmental management, focused on prevention logic, has had a positive net effect on its environmental performance. Besides, the order in which these practices were adopted favoured the development of new organisational capabilities that have contributed to the appearance of advantages derived from the greater accumulated experience of employees in creating new projects that are designed to reduce residues and pollution. COATO has also obtained a competitive advantage in differentiation thanks to an improved brand image and to its increased credibility in business relationships. Finally, a positive correlation exists between the pioneering proactive strategy adopted by this cooperative and the improvement of its firm performance with respect to the other firms in its sector.     

Management of mine spoil for crop productivity with lignite fly ash and biological amendments

Long-term field trials using lignite fly ash (LFA) were carried out in rice crops during the period 1996-2000 at Mine I, Neyveli Lignite Corporation, Tamil Nadu. LFA, being alkaline and endowed with an excellent pozzolanic nature, silt loam texture, and plant nutrients, has the potential to improve the texture, fertility, and crop productivity of mine spoil. The rice crops were the first, third, fifth, and sixth crops in rotation. The other crops, such as green gram (second) and sun hemp (fourth), were grown as green manure. For experimental trials, LFA was applied at various dosages (0, 5, 10, 20, 50, 100, and 200 t/ha), with and without press mud (10 t/ha), before cultivation of the first crop. Repeat applications of LFA were made at the same dosages in treatments of up to 50 t/ha (with and without press mud) before cultivation of the third and fifth crops. Press mud, a lightweight organic waste product from the sugar industry, was used as an organic amendment and source of plant nutrients. Also, a recommended dosage of chemical fertilizer, along with gypsum, humic acid, and biofertilizer as supplementing agents, was applied in all the treatments, including control. With one-time and repeat applications of LFA, from 5 to 20 t/ha (with and without press mud), the crop yield (grain and straw) increased significantly (p < 0.05), in the range from 3.0 to 42.0% over the corresponding control. The maximum yield was obtained with repeat applications of 20 t/ha of LFA with press mud in the third crop. The press mud enhanced the yield in the range of 1.5-10.2% with various dosages of LFA. The optimum dosage of LFA was 20 t/ha for both one-time and repeat applications. Repeat applications of LFA at lower dosages of up to 20 t/ha were more effective in increasing the yield than the corresponding one-time applications of up to 20 t/ha and repeat applications at 50 t/ha. One-time and repeat applications of LFA of up to 20 t/ha (with and without press mud), apart from increasing the yield, evinced improvement in the texture and fertility of mine spoil and the nutrient content of crop produce. Furthermore, some increase in the content of trace and heavy metals and the level of gamma-emitters in the mine spoil and crop produce was observed, but well within the permissible limits. The residual effect of LFA on succeeding crops was also encouraging in terms of eco-friendliness. Beyond 20 t/ha of LFA, the crop yield decreased significantly (p < 0.05), as a result of the formation of hardpan in the mine spoil and possibly the higher concentration of soluble salts in the LFA. However, the adverse effects of soluble salts were annulled progressively during the cultivation of succeeding crops. A plausible mechanism for the improved fertility of mine spoil and the carryover or uptake of toxic trace and heavy metals and gamma-emitters in mine spoil and crop produce is also discussed.     

适宜性评价视角下的煤矿土地复垦技术措施研究——以白山市道清沟煤矿为例

基于土地适宜性评价方法,着重选取极限值条件法、AHP层次分析法、加权指数和法对白山市道清沟煤矿区的土地适宜类和土地质量等进行系统综合的分析,判定道清沟煤矿待复垦土地的类型、数量和质量。基于土地破坏现状和适宜性评价结果,提出以工程措施为主、生物化学措施为辅助的土地生态重构对策。     

Economic Values and Corporate Financial Statements

Corporate financial statements do not include environmental values. This deficiency has contributed to the criticism that company managers do not include environmental impacts in the internal decision-making process. The accounting profession has not developed effective environmental reporting guidelines. This situation contributes to a second problem: the apparent inability of corporate reports to provide useful information to external parties. It has been suggested that by using nonmarket valuation methodologies, financial statements can be used to measure progress toward sustainable development. Nonmarket valuations are not generally accepted by the accounting profession. They are too subjective to support effective decisions, and too costly to obtain. Furthermore, demand for this sort of information appears small. Some of these issues may be resolved over time. The most serious challenge, however, concerns how enhanced financial reports would be used. Financial statements are supposed to help investors assess the amount, timing, and uncertainty of future cash flows. A substantial portion of environmental value is based on nonuse benefits, much of which will never be realized in company cash flows. In other words, the role of financial statements would have to change. Furthermore, since there is no general agreement as to the meaning of sustainable development, efforts to operationalize the term have been fraught with difficulty. Moreover, monetization of environmental values could jeopardize their preservation, leaving some to question the overall objective of this form of reporting. For these reasons, while it is to be hoped that better reporting of environmental impacts will be forthcoming, the greatest advances will likely be outside the financial statements themselves.     

Heavy metal distribution and chemical speciation in tailings and soils around a Pb-Zn mine in Spain

Soil pollution by lead, zinc, cadmium and copper was characterized in the mine tailings and surrounding soils (arable and pasture lands) of an old Spanish Pb-Zn mine. Sixty soil samples were analyzed, determining the total metal concentration by acid digestion and the chemical fractionation of Pb and Zn by the modified BCR sequential extraction method. Samples belonging to mine waste areas showed the highest values, with mean concentrations of 28,453.50 mg kg(-1) for Pb, 7000.44 mg kg(-1) for Zn, 20.57 mg kg(-1) for Cd and 308.48 mg kg(-1) for Cu. High concentrations of Pb, Zn and Cd were found in many of the samples taken from surrounding arable and pasture lands, indicating a certain extent of spreading of heavy metal pollution. Acidic drainage and wind transport of dust were proposed as the main effects causing the dispersion of pollution. Sequential extraction showed that most of the Pb was associated with non-residual fractions, mainly in reducible form, in all the collected samples. Zn appeared mainly associated with the acid-extractable form in mine tailing samples, while the residual form was the predominant one in samples belonging to surrounding areas. Comparison of our results with several criteria reported in the literature for risk assessment in soils polluted by heavy metals showed the need to treat the mine tailings dumped in the mine area.     

Environmental bonds and the challenge of long-term carbon sequestration

The potential to capture carbon from industrial sources and dispose of it for the long-term, known as carbon capture and sequestration (CCS), is widely recognized as an important option to reduce atmospheric carbon dioxide emissions. Specifically, CCS has the potential to provide emissions cuts sufficient to stabilize greenhouse gas levels, while still allowing for the continued use of fossil fuels. In addition, CCS is both technologically-feasible and commercially viable compared with alternatives with the same emissions profile. Although the concept appears to be solid from a technical perspective, initial public perceptions of the technology are uncertain. Moreover, little attention has been paid to developing an understanding of the social and political institutional infrastructure necessary to implement CCS projects. In this paper we explore a particularly dicey issue--how to ensure adequate long-term monitoring and maintenance of the carbon sequestration sites. Bonding mechanisms have been suggested as a potential mechanism to reduce these problems (where bonding refers to financial instruments used to ensure regulatory or contractual commitments). Such mechanisms have been successfully applied in a number of settings (e.g., to ensure court appearances, completion of construction projects, and payment of taxes). The paper examines the use of bonding to address environmental problems and looks at its possible application to nascent CCS projects. We also present evidence on the use of bonding for other projects involving deep underground injection of materials for the purpose of long-term storage or disposal.     

The influence of metal source uncertainty on cost-effective allocation of mine water pollution abatement in catchments

In mine water pollution abatement, it is commonly assumed that known mine waste sites are the major pollution sources, thus neglecting the possibility of significant contribution from other old and diffuse sources within a catchment. We investigate the influence of different types of pollution source uncertainty on cost-effective allocation of abatement measures for mine water pollution. A catchment-scale cost-minimization model is developed and applied to the catchment of the river Dalälven, Sweden, in order to exemplify important effects of such source uncertainty. Results indicate that, if the pollution distribution between point and diffuse sources is partly unknown, downstream abatement measures, such as constructed wetlands, at given compliance boundaries are often cost-effective. If downstream abatement measures are not practically feasible, the pollution source distribution between point and diffuse mine water sources is critical for cost-effective solutions to abatement measure allocation in catchments. In contrast, cost-effective solutions are relatively insensitive to uncertainty in total pollutant discharge from mine water sources.     

NAFTA and member country strategies for maritime trade and marine invasive species

Maritime shipping has two vectors of spreading marine invasive species: ballast water inside the ship and biofouling on the hulls outside the ship. While some attention has focused on ballast water, virtually none is focused on biofouling. This paper offers a quantitative analysis of economic incentives for shippers and regulating ports to address both pollution vectors. The strategies to address the vectors are induced by incentive mechanisms involving liability, subsidies and taxes. Results show these offer ample incentives in order to truly foster abatement of both vectors. Data from North America's Pacific coast is included in the analysis.     

Environmental flows for rivers and economic compensation for irrigators

Securing flows for environmental purposes from an already fully utilized river is an impossible task--unless users are either coerced into freeing up water, or offered incentives to do so. One sensible strategy for motivating users to liberate volumes is to offer them economic compensation. The right amount for that compensation then becomes a key environmental management issue. This paper analyses a proposal to restore and maintain ecosystems on a stretch of the Río Conchos in northern Mexico, downstream from a large irrigation district that consumes nearly all local flows. We present here estimates of environmental flow requirements for these ecosystems and compute compensation figures for irrigators. These figures are derived from crop-specific irrigation water productivities we statistically estimate from a large set of historical production and irrigation data obtained from the district. This work has general implications for river ecosystem management in water-stressed basins, particularly in terms of the design of fair and effective water sharing mechanisms.