Dark side of the boom
As the mining boom winds down and the mining clean up boom begins, mine site rehabilitation and mine abandonment are emerging as major issues for Australian communities, governments and taxpayers. All stakeholders will need information on the status of mines and their rehabilitation efforts to ensure this is carried out in a way that does not leave taxpayers and the environment with the costs of abandoned mines and rehabilitated sites.
Unfortunately few reliable statistics are available. While detailed statistics are published on current mine production, price forecasts and future mining projects, far less data is available on mines that are not producing and may be abandoned.
This report attempts to compile data from each state’s relevant department on numbers of mines that are operating, have suspended operations (are in “care and maintenance”), are being closed and have been abandoned. We also summarise available information on the environmental bonds that miners pay to governments.
Most states’ mining departments do not publish detailed estimates of how many mines are operating in the state. Australia has somewhere between 460 and 2,944 mines currently operating according to government estimates. Much of this discrepancy is definitional. Some databases include huge numbers of small mines categorised as operational, but they are only worked intermittently, if at all. Other sources count only “significant” mines, but this categorisation is subjective and rarely defined. Other major mining complexes are sometimes counted as one complex or as many separate mines.
Little data is published on mines in care and maintenance. Official estimates aggregate to between 206 and 972 mines in care and maintenance across Australia. In addition to the same definitional problems above, distinguishing between mines that are likely to recommence production and mines that will remain closed is difficult. To assist with this question we asked departments for statistics on how many of the mines currently not operational had been in care and maintenance for the last 5, 10, 20 and 30 years. Tasmania was the only state able to provide this information. Most had examples of mines being in care and maintenance for decades, one in the NT since the 1920-30s.
Still less information is available on mines undergoing final closure. Data from Tasmania and examples from other states sum to 8 mines that have begun final closure in the last ten years. Western Australia’s database includes 1,137 mines that are “shut” although the scale and precise status of these sites is unclear.
Mine closure, complete rehabilitation and relinquishment of the former mine site is almost unknown in Australia. Known examples are the New Wallsend coal mine in NSW and a sand quarry near Melbourne. Tasmanian data lists one in the last ten years and a further five over the last thirty years, although the rehabilitation standard of the earlier sites is unclear. There are no examples of major, modern open cut mines completing rehabilitation to the point where the site can be relinquished.
In stark contrast, numbers of abandoned mines are huge across Australia, with estimates of around 60,000 sites, although again definition and scale are important. While definitions and data limitations make exact numbers of abandonments difficult to estimate, what is certain is that this is not a practice limited to distant history. In 2015 the Western Australian government took on responsibility for a diamond mine and a nickel mine that had been abandoned in the last two years. Last year Queensland taxpayers became liable for a silver mine abandoned in 2015 and a tin mine that produced until at least 2008. On average one mine is abandoned per year in Victoria, including the Benambra gold mine which has already cost Victorian taxpayers $7 million. As the owners of the largest mines come under financial pressure, such as the coal company Peabody, close attention needs to be paid to the ongoing phenomenon of mine abandonment in Australia. This represents a massive subsidy to the mining industry, paid by taxpayers and the community through a degraded environment.
Australian governments hold around $10 billion in environmental bonds to assist with rehabilitation if companies abandon their sites. In most cases there is considerable concern that these bonds may be insufficient to cover rehabilitation liabilities of operating mines. Large open cut mines can cost hundreds of millions or even billions of dollars to rehabilitate. Departments and Auditors General in several states have expressed concern that states are facing serious liabilities.
The stakes are high in Australia’s mining clean up boom. The Australian public stands to incur billions of dollars in rehabilitation costs through either use of taxpayer funds or a degraded environment if rehabilitation is not well managed and regulated. This would represent a huge subsidy to the mining industry. The large number of historical and modern abandoned mines compared with the handful of fully rehabilitated sites shows that the mining industry does not have a good record at cleaning up after itself.
The last ten years have seen an increase in public attention paid to mining activity, with community groups and NGOs playing a key role in working with and monitoring the mining industry. Provision of better data on mines in each state, their status and history, would empower the community, the industry and the public service to ensure that sites are properly rehabilitated.