Closing a mine is not a simple exercise, but mining companies who take a proactive stance to the undertaking are likely to be best off. We take a closer look at some of the best strategies for mine closure and rehabilitation.
The International Mining and Resources Conference (IMARC), which was held in Sydney in early November, offered a veritable smorgasbord of insightful panel discussions and presentations.
On the second day of the three-day event, representatives from Rio Tinto, OceanaGold, MinterEllison and more came together to discuss the importance of improving post-mining legacies.
The panel combined the expertise of miners, service providers, industry bodies and lawyers to provide a holistic perspective of a practice that remains a work in progress.
Mine closure continues to be a significant industry challenge that necessitates proactive planning and substantial financial outlay to manage associated social, safety and environmental risks. According to the International Council on Mining and Metals (ICMM), there are few examples of mines that have received closure certificates and where the site has been transferred to government or a third party.
When OceanaGold head of health, safety and environment Greg Scanlan was asked what his company is doing differently to address this concern, he said there’s been a greater effort to boost the dialogue around closure criteria.
“It’s probably not so much different to people that have been closing mines or have tried to close mines for a long time now, but what we’re doing better … is (facilitating) more dialogue and more clarity around the closure criteria,” he said.
Scanlan said situations could change during the course of a mine’s life, such as nearby towns growing closer to site, with more land uses that need to be considered for alternative closure use. There could even be opportunities to capitalise on existing on-site infrastructure that could be used as an amended closure asset post-mining.
To better understand and facilitate these changes, clarity around closure criteria is critical.
“(So) what we are doing differently or what we need to do differently is really nail down the closure criteria and be flexible as you work towards closure,” Scanlan said. “And have a lot of dialogue with people to understand what the real closure criteria are in the mine life.”
Rio Tinto general manager closure – strategy and optimisation Melanie Stutsel said there were two things the major miner, which is actively closing 10 operations globally, is doing differently in mine closure now than it has in the past.
“The first is we’re looking at how we consider all of the options for our fixed and local plant, and how that can be used more effectively to deliver retained social, economic or cultural value for communities in a post-mining sense,” she said.
“So (we’re) working with our local communities to identify what their aspirations are for that location, which of our assets can provide a beneficial use, and which of those are at risk of being a ‘white elephant’, for want of a better term.”
Stutsel said Rio Tinto was placing an emphasis on ensuring it doesn’t leave communities with stranded assets that come with significant post-mining management costs.
The miner is also being more transparent in its processes.
“It’s a different kind of conversation we’re having with our local communities where we’re certainly being more upfront,” Stutsel said.
Stutsel used the example of a highwall, which Rio may not be able to safely return to its prior state during mine closure, and the importance of being clear and open about these risks so the company and local communities are on the same page.
This is also the case with regulators, where Stutsel said it was important to encourage a change in regulatory expectations so there is more flexibility around mine closure and returning infrastructure, such as a highwall, to their prior state is not the singular goal.
According to CRC TiME, a collaboration of more than 70 leading mining entities addressing the challenges underpinning mine closure and relinquishment, there are very few examples of successful mine closure and relinquishment, with it becoming an “increasingly adversarial and complex area”.
One of the key challenges encumbering successful closure, CRC TiME believes, is inflexible policies and frameworks that have been agreed sometimes decades earlier and no longer serve all interests.
MinterEllison partner Simon Ball, a lawyer who has supported numerous Tier 1 mining companies through environmental and planning approvals, said it was quite common for legal frameworks to become outdated.
“I think a lot of the legal frameworks are designed to establish new mines, and they lock in an outcome very early on in the planning process,” Ball said during the panel discussion.
“Whereas when you get to closure, it involves a lot more stakeholders within government with views, and it’s only at that time that the actual studies may come to light that may demonstrate that outcomes are not achievable, or that the community has moved on, or expectations have moved on.”
Ball said this can often mean that the outcomes that were identified years before, when the operation was opened, are no longer what’s desired when mine closure occurs.
He said governments could also be “more nimble”.
“This isn’t to be critical of the government – I think it’s a really difficult issue – but they could be more nimble sometimes,” Ball said.
Miners need development consents to carry out on-site developments, which may need to be processed and approved by government. This can include repurposing exercises during mine closure. But opportunities can quickly come and go.
“The market windows for some of those repurposing outcomes close very quickly and sometimes the planning system can’t process the outcome quick enough to allow that outcome to be taken advantage of,” Ball said.
Ball used the example of brownfield mines that can be repurposed into renewable energy hubs, but again highlighted the short window of opportunity that comes with this situation; the business opening could close.
The Kidston pumped storage project is one repurposing success story. The Kidston gold mine in far north Queensland was once home to Australia’s largest open-cut gold mine until the project closed in 2001 after 90 years of operation.
Genex, an ASX-listed power company, is now transforming the site into a clean-energy hub by combining solar, wind and pumped-storage hydropower.
The project essentially turns the mine’s massive open pits into a giant battery by pumping water into an upper energy-storage reservoir when energy prices are low. It then releases the water through reversible turbines into the lower reservoir to generate power when energy demand is high.
The facility will store energy from an operational 50 megawatt (MW) solar farm, as well as a planned 150MW wind farm due for completion in 2024.
Another emerging project turning an old mine into a renewable energy precinct is taking place at the Muswellbrook coal mine in the upper region of the Hunter Valley in New South Wales.
In addition to a pumped hydro project, there is potential to add solar, battery storage and green hydrogen facilities to the mix.
SRK Consulting principal consultant – mine closure Danielle Kyan told Australian Resources & Investment in an October editorial that she expects more future mine closures in Australia to involve the construction of renewable infrastructure.
“Some mines suit wind, solar, hydroelectric, geothermal or other renewable assets,” she said. “The mines are typically on large, cleared areas of land, have been used for industrial purposes, and have existing infrastructure and a potential workforce.”
The solution is deemed more suitable given many mining companies already use renewable technologies.
“We see a number of mines in remote areas installing renewable energy grids to power their sites,” Kyan said. “They’re using renewables in an operational capacity to reduce the project’s carbon footprint.
“The next step is exploring renewables in mine-closure planning strategy to create new opportunities.”
Kyan said the opportunity to build renewable energy assets on old mine sites can also improve economic perceptions.
“Mine closure has always been thought of as a cost,” she said. “Renewables can provide an opportunity to develop new income from disused sites.
“That could change how we think about and fund mine closure.”
The cost of running a mine is not insignificant and economic downturns can lead to operations being closed earlier than desired.
Regardless, the legacy of a mine needs to considered no matter when the curtains come down on an operation, and Scanlan said the best preparation is to operate a mine “for closure”.
“Most jurisdictions that we operate in require us to submit a bond or some money as security against mine closure,” he said.
“The main thing (a company) can do is to operate the mine for closure. The cost of closure when you’re operating the mine poorly are escalated, and it would be much harder to cover those costs.”
But Scanlan said a company would have to be experiencing a significant financial squeeze if it was to foreclose a mine when it had not reached the end of its life, given the commercial opportunities still available.
“Most mines would normally go into a care and maintenance phase rather than a closure phase,” he said.
CRC TiME is also emphasising the importance of mine-closure preparation and proactivity. The body’s risk, evaluation and planning program, which is led by mineral economist and associate professor Bryan Maybee, is focused on promoting the importance of integrating closure and rehabilitation activities into mine planning practices.
“When we’re creating our original mine plan at CRC TiME, we make sure mine closure and rehabilitation is part of the decision process,” Maybee said during a September panel discussion exploring the importance of technology in mine rehabilitation. “We make sure it’s part of how we strategically build our mindset.
“As part of that, we look at where we can use technology to change the way we think about rehabilitation.”
Maybee said there were two ways technology can support this process.
“We’ve got technology allowing us to plan the closure and rehabilitation activities as part of that early planning process, in order to get our license, in order to make sure we adhere to whatever regulations there are,” he said.
“Once that’s in place and we start to think about technologies – such as automated components, which allow us to do certain rehabilitation activities progressively in the same location as where mining is taking place – we can start to think differently about the way we plan the mine.
“So now, rather than thinking about closing a mine after it’s done, we can start to think about planning the mine for closure and consider that mining is just one use of that land; there will be another use afterwards.
“How do we transition to that post-mining use as part of the initial land use plan we devise right from the start?”
If you got a group of mine closure experts into a room to talk about their vocations, the discussion could last for days, such is the expansiveness of the topic. There is no one right way to close a mine; however, companies that proactively plan and strategise for the end of a mine’s life are likely to be the best off.
Because no company wants to bear the brunt of a nasty mine-closure bill.
This feature appeared in the December issue of Australian Resources & Investment.