Failed mine rehabilitation fees could have taxpayers footing the bill

A Western Australian initiative to refund mine rehabilitation funds has backfired, critics say.

It comes after more than 70 projects ceased operations, raising fears taxpayers will have to foot the site remediation fees. 

The state believed $1 billion in funding would protect miners from the dropping commodity prices, but the ongoing downturn could leave a gap of millions of dollars in unfunded or underfunded rehab responsibilities left by the closed sites.

The cash return stemmed from the large revenues generated from the state’s mining industry, which in turn drove both state and federal government revenues.

In exchange, miners added small amounts each year into a Mining Rehabilitation Fund, which raised $64 million since its conception three years ago.

State lawmaker Bill Johnston, who oversees the Labor Party’s mining policies, said WA already has $60 million in clean up costs, with some at risk miners taking the cash return then suspending or collapsing operations afterwards, the AFR reports.

“Too much money was reimbursed too quickly and there’s a risk that figure will grow and ultimately be passed on to the taxpayer,” he said.

The shut down of four mines and suspension of just over 70 projects has incited concerns over these sums set aside for rehabilitation being refunded to miners.

Miners as well as the WA state government are defending the new system, saying it frees up capital and provides rehabilitation funding to sites throughout the state compared to a bond system where the funds are used only on the project holder’s site.

The Queensland government recently passed the new Chain of Responsibility laws, enabling them to pursue individuals to ensure they meet their environmental obligations.

They also decided to review their current system for calculating financial assurances (FA) related to mine rehabilitation, delivering an increase in FA should mining companies fail to pay their rehabilitation costs.

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