The importance of getting mine closure costing right

Historically, mine closure costs have been underestimated. Until 1990, bonds to secure mine reclamation obligations in British Columbia (BC) were limited to $2,500 per hectare. The impact of limiting mine security is increased liability for BC taxpayers and the environment. A 2003 study of historic mine sites in BC identified 1,887 unpermitted "past producing" mines in the province, 1,171 of which are mineral deposits with the potential for generating acid of leaching of metals into the environment. While the Mines Act and the Health, Safety and Reclamation Code for Mines in British Columbia require reclamation liability cost estimates for outstanding closure liabilities, guidance is limited on how to determine these costs. Ultimately the chief permitting officer has final say in the amount of financial security required. This can leave mining companies with underestimated closure costs and uncertainty of how to measure success. In BC, the mining industry is changing: provincial regulators, as well as major mining companies, recognize the importance of getting mine reclamation and closure costing “right”. In April 2022, the Ministry of Energy, Mines and Low Carbon Innovation released a Major Mines Reclamation Security Policy (Interim) in response to a 2016 Office of Auditor General of BC (OAG) audit. The OAG recommended “…government safeguard taxpayers by ensuring the reclamation liability estimate is accurate and that the security held by government is sufficient to cover potential costs”. This paper will examine the impact of closure costing as an afterthought, the importance of “getting it right”, the ways mines can reduce liability by addressing obligations during operations, and the methods available to mining companies to improve closure costing estimates.Non UBCUnreviewedOthe