Millions in 'dead' tenement bonds to be returned

THE Western Australian Mines Department has moved to return $A6 million in bonds to mining companies and individual investors which once held tenements now considered dead.
Millions in 'dead' tenement bonds to be returned Millions in 'dead' tenement bonds to be returned Millions in 'dead' tenement bonds to be returned Millions in 'dead' tenement bonds to be returned Millions in 'dead' tenement bonds to be returned

Bill Marmion

Staff Reporter

“Dead” tenements in this context as defined as land where a former owner no longer holds exploration or mining rights due to the expiration of a rights timeframe or forfeiture of the property.

“At the beginning of 2014, the department was holding almost $11million in unconditional performance bonds for nearly 400 dead tenements,” Mines Minister Bill Marmion said.

“These dead tenements cannot enter the mining rehabilitation fund, so the bonds can only be returned to the dead tenements’ former holders once the department is satisfied that any land disturbance has either been fully rehabilitated, or absorbed into another mining operation.

“The department has been investigating each dead tenement and, where it is satisfied that rehabilitation has occurred or the tenement has been absorbed, the bonds are being retired and returned to the former holders.

“In addition to these bonds that are currently being retired, many operators have also indicated they will now complete the required rehabilitation to enable the bonds on their dead tenements to be retired.”

Any bonds that are left remaining on dead tenements will eventually be called in to assist with future rehabilitation of the outstanding sites.

Marmion added that the introduction of the rehabilitation fund had been a positive move for both the government and industry.

“The state government’s contingent liability for rehabilitation of legacy abandoned mines has been reduced from potentially $5 billion down to zero,” he said.

“Many operators have seen a reduction in annual operating costs and those with a rehabilitation liability of less than $50,000 aren’t subject to the annual levy, meaning that funds are freed up for further investment.

“As annual contributions to the fund are based on the amount and type of ground disturbance, the mining rehabilitation fund also acts as an incentive for ongoing rehabilitation.”

The stricter system replaces the old policy, which required unconditional performance bonds (UPB) to secure rehabilitation obligations.

A UPB is a form of contract between the mines minister and a financial institution, which commits the institution to pay an agreed sum where a tenement holder fails to meet its rehabilitation commitments.

In consideration for a UPB, an institution usually charges tenement holders financing fees or requires the value of the contract to be deposited.

After visiting the abandoned Elverdton copper mine at Ravensthorpe on WA’s south coast earlier this year – where a tailings dump is eroding into a river – Marmion issued a warning that environmental bonds would be withheld from miners deemed at high risk of failing their obligations.

Most read Archive



Most read Archive