Financial Assurance Mine Closure Calculator

Challenge

In March 2014, the Queensland government released a new guideline, along with a calculator, for determining the amount of financial assurance (FA) needed to pay if you are a holder of an environmental authority (EA) for a mining or petroleum lease in that State.

Financial assurance is based on the likely costs and expenses that the Queensland Government may incur when taking action to rehabilitate or restore and protect the environment due to the environmental harm an activity may cause. All financial assurance calculations must be undertaken according to the methodology approved in the Queensland Government’s financial assurance guideline.

Our team were engaged to assist on the development of an FA calculator, suitable for the mining and oil and gas sectors. Calculating mine closure security bonds for all mining and extractive industry operations within those states were also required.

Solution

Our team assisted on the following:

• Developing the FA calculator through consultation with the two sector representatives (Queensland Resource Council and Australian Petroleum Production Exploration Association).
• Conducting workshops with the Environment and Heritage Protection compliance officers in Cairns, Rockhampton and Brisbane.

The developed financial assurance guideline includes details on:

• When financial assurance is required
• Calculating financial assurance
• Applying for a discount on your financial assurance
• Paying financial assurance
• Amending, discharging or claiming financial assurances
• Mandatory information requirements when applying for a decision on financial assurance by your administering authority
• Mandatory decision criteria that the administering authority must consider when making a decision.