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.     

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.     

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.     

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 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.     

Lichens as biomonitors of air quality around a diamond mine, northwest territories, Canada

Lichens are known to be bioaccumulators of atmospheric pollutants and are abundant in the Canadian arctic. Mining in this region may negatively impact the tundra communities and these impacts may be detected by increased accumulation of heavy metals, greenhouse gas constituents, and organic compounds in lichen tissue. The effect of sampling direction and distance from a diamond mine on bioaccumulation in three lichen species, Flavocetraria nivalis, Flavocetraria cucullata, and Cladina arbuscula, was investigated. Eight sample sites were located immediately adjacent to a diamond mine, one in each cardinal and ordinal direction, and six sample sites each were located 30 and 60 km from the mine (cardinal, NE, and SE). Thirty-three major and trace elements, sulfate (SO(4)), nitrate (NO(3)), ammonium (NH(4)), polycyclic aromatic hydrocarbons (PAH), and phthalates were analyzed in lichen tissue and soil. A significant interaction occurred between distance and direction from the mine. Highest concentrations of Al, Cr, Cu, Fe, Ni, Ti, and V in lichen were at the mine site regardless of direction. Highest concentrations for all other elements were at the mine in at least two directions. Although present in lichen tissue, there was no significant difference among sites for Hg, Mn, S, and three phthalates. PAHs were below detection limits in lichen tissue. The effect of direction was dependent on element and species, although concentrations of most elements were greatest east or southeast of the mine site. At distance from the mine, direction had less of an effect on concentrations. Elevated concentrations in tissue did not negatively impact lichen or plant cover or lichen richness. This research strongly suggests selection of sample sites and species can impact results and interpretation of data from air quality monitoring programs that use lichens as biomonitors.     

Multiproduct mine output and the case of mining waste utilization

This article addresses the concepts of economies of scope and multiproduct production, subadditivity and transray convexity as it applies to the mining industry. The article goes on to expand these concepts to include the case of mining waste utilization. It discusses how the modification of mining wastes into a marketable product can develop a relationship across the cost functions of the modified mining waste and ore production and how this interrelationship affects the profit maximizing condition. It discusses four possible outcomes from mining waste modification and its development into marketable products on the profitability and production of ore by the firm. Finally, it discusses mining waste utilization effects on rehabilitation costs and the potential for a decrease in the adverse community effects due to mine closure.     

Economic responses to the closure of small-scale coal mines in Chongqing,China

In 1998, China launched a programme to close tens of thousands of small-scale coal mines within just three years. Few measures were put in place to mitigate the negative impacts. This paper reports on a study in the Chongqing Municipality of south-west China, with the aims of identifying the economic impacts of the mine closure campaign and examining what factors permitted some localities to respond more successfully to the resulting economic challenges. Those areas with greater wealth and more diversified economies were able to absorb the shock of mine closure more effectively than poorer areas and those with less diversified economies. These latter groups either failed to respond to mine closure or reacted by increasing output from the remaining mines. In the successful cases, though the economy of the area as a whole was able to withstand the impact of the mine closure campaign, no evidence was found of any attempts to assist those in the local communities directly affected by mine closure.     

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.     

Characteristics of coal mine ventilation air flows

Coal mine methane (CMM) is not only a greenhouse gas but also a wasted energy resource if not utilised. Underground coal mining is by far the most important source of fugitive methane emissions, and approximately 70% of all coal mining related methane is emitted to the atmosphere through mine ventilation air. Therefore, research and development on mine methane mitigation and utilisation now focuses on methane emitted from underground coal mines, in particular ventilation air methane (VAM) capture and utilisation. To date, most work has focused on the oxidation of very low concentration methane. These processes may be classified based on their combustion kinetic mechanisms into thermal oxidation and catalytic oxidation. VAM mitigation/utilisation technologies are generally divided into two basic categories: ancillary uses and principal uses. However, it is possible that the characteristics of ventilation air flows, for example the variations in methane concentration and the presence of certain compounds, which have not been reported so far, could make some potential VAM mitigation and utilisation technologies unfeasible if they cannot cope with the characteristics of mine site ventilation air flows. Therefore, it is important to understand the characteristics of mine ventilation air flows. Moreover, dust, hydrogen sulphide, sulphur dioxide, and other possible compounds emitted through mine ventilation air into the atmosphere are also pollutants. Therefore, this paper presents mine-site experimental results on the characteristics of mine ventilation air flows, including methane concentration and its variations, dust loadings, particle size, mineral matter of the dust, and other compounds in the ventilation air flows. The paper also discusses possible correlations between ventilation air characteristics and underground mining activities.     

Biological mine drainage treatment

Drainage from sulphur mines contains a high concentration of ferrous iron and it is strongly acidic. The mechanism of acid mine drainage formation was briefly explained. As a case study, successful measures taken at the abandoned Matsuo mine, Iwate Prefecture, Japan, for preventing the pollution in receiving rivers was presented in this paper. The measures consisted of the construction works against pollution sources and the construction of a drainage treatment plant in which Thiobacillus ferrooxidans oxidizes ferrous iron under a low pH condition, and produced ferric iron is removed by sedimentation. Then, a laboratory-scale fluidized bed reactor using anion exchange resin as attaching material for the bacteria was examined in order to improve the efficiency of biological oxidation of ferrous iron. More than 90% of oxidation had been maintained for 2 months at 1 h of HRT, which suggests that the size of the oxidation tank could be reduced.     

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.     

Derivative mine valuation: strategic investment decisions in competitive markets

Successful management in competitive markets requires evaluation methods that respond to global market dynamics and provide investors with relevant information to make strategic investment decisions. These strategic decisions include decisions on investment timing, feasibility study and risk management and mine operating options. Conventional methods do not have the built-in capabilities to help investors handle these strategic issues. Advances in modern finance have had profound impacts on financial markets for options, futures and collaterized securities and offer appropriate tools in solving these problems. In this paper, the authors have extended the Brennan and Schwartz mineral resource model to develop the derivative mine valuation method based on the dynamic arbitrage theory. A copper mining venture has been evaluated using the derivative mine valuation and conventional methods. The results show that the derivative mine valuation method allows investors to maximize the venture's market value by exercising these strategic options.     

Long-term evaluation of coal fly ash and mine tailings co-placement: A site-specific study

This study presents the results of a laboratory investigation conducted to evaluate the efficiency of coal fly ash to control the formation of acid mine drainage (AMD) from mine waste. Site-specific materials, coal fly ash from Atikokan Thermal Generating Station and mine tailings from Musselwhite mine, were mixed at different proportions for the investigation of the drainage chemistry and the optimal mix using static testing (acid–base accounting) and kinetic (column) testing. The acid–base accounting (ABA) results indicated that the fly ash possessed strong alkaline (neutralization) potential (NP) and could be used in the management of reactive mine tailings, thus ensuring prevention of AMD in the long-term. Column tests conducted in the laboratory to further investigate long-term performance of fly ash in the neutralization and prevention of acid mine drainage from tailings similarly showed that mixing fly ash with mine tailings reduces dissolution of many heavy metals from tailings by providing alkalinity to the system. It was found that a fly ash to tailings mass ratio equal to or greater than 15% can effectively prevent AMD generation from Musselwhite mine tailings in the co-placement approach.     

Carbon sequestration potential in reclaimed mine sites in seven east-central states

Terrestrial systems represent a significant potential carbon (C) sink to help mitigate or offset greenhouse gas emissions. Nearly 3.2 Mha are permitted for mining activities in the United States, which are required to be reclaimed with vegetative cover. While site-specific studies have assessed C accumulation on reclaimed mine sites, regional analyses to estimate potential C increases have not been conducted. For this analysis, potential C sequestration is analyzed on 567,000 ha of mine land in a seven-state region reclaimed to cropland, pasture, or forest. Carbon accumulation is estimated for cropland, pasture, and forest soils, forest litter layer, and aboveground biomass by estimating average annual rates of C accumulation from site-specific and general C sequestration studies. The average annual rate of C storage is highest when mine land is reclaimed to forest, where the potential sequestration is 0.7 to 2.2 Tg yr(-1). The C from soils, litter layer, and biomass from mine lands reclaimed to forest represents 0.3 to 1.0% of the 1990 CO2 emissions from the study region (919 Tg CO2). To achieve the greenhouse gas (GHG) emission reduction goal of 7% below the 1990 level as proposed by the Kyoto Treaty requires CO2 emissions in the study area to be reduced by just over 64 Tg CO2. The potential carbon storage in mine sites reclaimed to forest could account for 4 to 12.5% of these required reductions.     

New mine capacity from yet-to-be found copper deposits

The copper industry in the USA is declining, but exploration for copper has been particularly promising in western Montana. The potential copper mine capacity of the area was estimated by using an interdisciplinary geological-economical assessment technique that categorizes deposits on the basis of development probability. Development probability is quantified and aggregated into potential new mine supply curves, which summarize resource potential of the region. The results suggest that copper resources in Montana and elsewhere are potentially large and that these resources probably will be mined at higher copper prices. This mineral assessment technique increases the usefulness of traditional methods for planners and policy makers.     

Cut-off net acid generation pH in predicting acid-forming potential in mine spoils

Acidification of mine wastes can lead to a series of environmental problems, such as acid drainage, heavy metal mobilization, and ecosystem degradation. Prediction of acid-forming potential is one of the key steps in management of sulfide-bearing mine wastes. In this paper, the acid-forming potential of 180 mine waste samples collected from 17 mine sites in China were studied using a net acid generation (NAG) method. The samples contained different contents of total sulfur (ranging from 0.6 to 200 g kg(-1)), pyritic sulfur (ranging from 0 to 100 g kg(-1)), and acid neutralization capacity (ANC, ranging from -41 to 274 kg H2SO4 t(-1)). Samples with high acid-forming potential are generally due to their high sulfur content or low acid neutralization capacity. After the samples were oxidized by H2O2, the amounts of acid generation and the final NAG pH were measured. Results indicated that the final NAG pH gave a well-defined demarcation between acid-forming and non-acid-forming materials. Samples with final NAG pH >or= 5 could be classified as non-acid-forming materials, while those with NAG pH 2.5, but < 5, had low risk of being acid-forming. The confirmation of cut-off NAG pH will be used as a rapid and cost-effective operational monitoring tool for the in-pit prediction of acid-forming potential of mine wastes and classification of waste types.     

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.     

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.     

Accelerated weathering of biosolid-amended copper mine tailings

Application of municipal biosolids to mine tailings can enhance revegetation success, but may cause adverse environmental impacts, such as increased leaching of NO3- and metals to ground water. Kinetic weathering cells were used to simulate geochemical weathering to determine the effects of biosolid amendment on (i) pH of leachate and tailings, (ii) leaching of NO3- and SO4(2-), (iii) leaching and bioavailability (DTPA-extractable) of selected metals, and (iv) changes in tailing mineralogy. Four Cu mine tailings from southern Arizona differing in initial pH (3.3-7.3) and degree of weathering were packed into triplicate weathering cells and were unamended and amended with two rates (equivalent to 134 and 200 Mg dry matter ha(-1)) of biosolids. Biosolid application to acid (pH 3.3) tailings resulted in pH values as high as 6.3 and leachate pH as high as 5.7, and biosolids applied to circumneutral tailings resulted in no change in tailing or leachate pH. Concentrations of NO3--N of up to 23 mg L(-1) occurred in leachates from circumneutral tailings. The low pH of the acidic tailing apparently inhibited nitrification, resulting in leachate NO3--N of <5 mg L(-1). Less SO4(2-)-S was leached in biosolid-amended versus unamended acid tailings (final rate of 0.04 compared with 0.11 g SO4(2-)-S wk(-1)). Copper concentrations in leachates from acidic tailings were reduced from 53 to 27 mg L(-1) with biosolid amendment. Copper and As concentrations increased slightly in leachates from biosolid-amended circumneutral tailings. Small increases in DTPA-extractable Cu, Ni, and Zn occurred in all tailings with increased biosolid rate. Overall, there was little evidence of potential for adverse environmental impacts resulting from biosolid application to these Cu mine tailings.