When Amy Winehouse wrote her song about rehab I am sure she didn’t have mine site rehab in mind. The principals of having a sustainable future and minimising harm however are still the same.
Over the past decade the level of Financial Assurance (FA) held by the QLD Government for mining activities has increased to $6 Billion an almost 500% increase over the 10 year period.
Why the increase? Well a lot comes down to the size of the disturbance footprint and the default rates that usually get applied to calculate the rehabilitation costs. Fortunately managing this is a relatively straight forward process.
The quantities can be optimised with well thought out land-form strategies. Unit costs can be estimated by a 3rd party expert or contractors quoting on the rehabilitation costs to reduce FA value. Typically these cost adjustments or quotes are valid for use as a 12 month assumption.
Finding ways to reduce the quantities or costs by 10%, or better still both, has yielded significant benefits to sites holding several hundred million dollars in FA liability. An extra $20M saving on FA is actually more beneficial than $20M on operational costs as it puts cash back in the bank.
Post by Simon Cohn – Managing Director