WA returns $1 billion in rehab bonds

The Department of Mines and Petroleum (DMP) has returned
more than $1 billion in bonds to mining companies since the introduction of the
Mining Rehabilitation Fund (MRF) in 2012.

The returns have been part of a program to retire environmental
bonds, which rolled out as companies have registered and paid their annual
levies to the MRF, which has now been compulsory for six months.

Acting DMP executive director (Environment) Dr Marnie
Leybourne said that around $1.2 billion was tied up in environmental bonds.

“This is money that companies are now able to invest in
development or use for progressive rehabilitation of their tenements,” she
said.

“The bonds system had several limitations, including that
bonds could only be used to rehabilitate the specific tenements against which
they were held, and the system provided no means to rehabilitate historical
abandoned mines.

“The cost of rehabilitation had also increased to the point
where the value of bonds held was estimated to only cover around 25 per cent of
the true cost of rehabilitation.”

Leybourne said the old system did not allow for funds to be
used to rehabilitate legacy mine sites and abandoned mines, and the MRF allows
for such expenditure to safeguard the state against future rehabilitation
requirements.

Great Western Exploration managing director Jordan Luckett
explained that the bond system requires companies to commit twice the value of
rehabilitation, to cover the cost of completing the work, before being able to
recover the original bond.

“The benefit of the MRF in our circumstance is that it
allows us to more efficiently use our capital and not have large amounts tied
up in bonds, sometimes for a number of years,” Luckett said.

“It is appropriate that the industry help fund the clean-up
of legacy areas and prevent them re-occurring in the future so that a sustainable
relationship with the community is maintained.

“I think over time it will build trust with the wider
community, especially if there is a transparent system in place that guarantees
the rehabilitation of mining areas and the cost is covered by the mining
industry.”

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