A comparative analysis of financial guarantee instruments for mine closure in relation to the interests of medium-sized mines

In this dissertation I comparatively analyse the various financial guarantee instruments for mine closure in relation to the interests of medium sized mines. I do this not to compare each instrument against each another but rather in order to ascertain which instruments are more beneficial to medium sized mine companies when included in a state legislation or a contract. Mine closure is clearly a certainty for all mines, however acquiring sufficient funding in order for holistic closure to occur has always been problematic. Thus the use of financial guarantee instrument may mitigate such concern and streamlining the choice will lead to attaining the holistic mine closure objectives. In chapter 1 I trace the history of mine closure as concept which has developed since the 1870s and I illustrate how the concept of mine closure has taken into consideration technical, social and environmental aspects. I do so in order to reinforce not only the scope of mine closure but to further emphasise the progression of the concept. Finally, I establish the current concept of mine closure, representing a meticulous concept comprising of far more than the traditional physical closure. Arising from this meticulous notion I discuss in chapter 2 the need for funding mine closure as the foremost concern regarding mine closure. I highlight the key justifications for the necessity for funding, I discuss the likely sources of such funding and I argue with whom the responsibility of funding falls onto. As the substantive core of this paper, in chapters 3 and 4 I introduce the most commonly opted for financial guarantee instruments and the most significant interests of medium sized mines regarding the financing of mine closure respectively. I deliberate concisely on each of the following instruments, namely: letter of credit; surety bond; cash trust fund; insurance scheme and self-guarantee and I discuss very briefly the most significant interests, namely: profitability, liquidity, accessibility, corruption and tax implications. Finally in chapter 5 I analyse and compare the discussed financial guarantee instruments for mine closure against the interests of medium sized mines in order to establish which are the most beneficial to the medium sized mine company in the completion of holistic mine closure.National Research Foundatio