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

Peck, Philip LU and Sinding, Knud (2009) In Resources Policy 34(4). p.227-233
Abstract
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... (More)
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. (C) 2009 Published by Elsevier Ltd. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Stakeholder management, Financial assurance, Mine closure
in
Resources Policy
volume
34
issue
4
pages
227 - 233
publisher
Elsevier
external identifiers
  • wos:000271692800007
  • scopus:70349823868
ISSN
0301-4207
DOI
10.1016/j.resourpol.2009.03.001
language
English
LU publication?
yes
id
e5219ecd-6879-40c8-aa33-17567a52e91c (old id 1518676)
date added to LUP
2009-12-28 14:47:56
date last changed
2017-08-27 04:01:40
@article{e5219ecd-6879-40c8-aa33-17567a52e91c,
  abstract     = {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. (C) 2009 Published by Elsevier Ltd.},
  author       = {Peck, Philip and Sinding, Knud},
  issn         = {0301-4207},
  keyword      = {Stakeholder management,Financial assurance,Mine closure},
  language     = {eng},
  number       = {4},
  pages        = {227--233},
  publisher    = {Elsevier},
  series       = {Resources Policy},
  title        = {Financial assurance and mine closure: Stakeholder expectations and effects on operating decisions},
  url          = {http://dx.doi.org/10.1016/j.resourpol.2009.03.001},
  volume       = {34},
  year         = {2009},
}