Reviews and Updates of Securities
BC Mining Issue:BC’s law on setting security amounts does not ensure that adequate funds are secured to cover remediation costs.
Fair Mining Best Practice:Require that security amounts based on independent contractor rates, and require professional certification of reclamation cost estimate.
Activities at mine sites are constantly changing, including when new ore deposits are developed and mining activities expanded. It is therefore essential that security amounts are frequently reviewed and updated.
The volumes of material, metals and chemicals handled in the mining sector, and the long time period over which they can create contamination, suggest to us that adequate financial assurances are important to maintain and must be examined periodically.
– BC Auditor General (2002)
Under current legislation, the Chief Inspector has broad powers to amend a security whenever he or she considers it necessary. Policy recommends that reviews occurevery five years or when significant changes occur at the mine. However, reviews are not consistently carried out. This could be remedied by legally requiring that security amounts be reviewed at set intervals.
A recent review of coal mine permits in BC revealed lapses of 10 to 20 years between mine security increases. In Washington, security amounts must be reviewed every two years.
Giving Government Access to and use of, Security Funds
If a mine fails to complete the reclamation program or comply with permit conditions, the Chief Inspector has a lot of discretion in applying security funds toward the cost of work required. Unlike BC, other jurisdictions like Alberta, set specific rules on the circumstances when the government will have access to mine security funds.
Because mine clean-up costs are uncertain, it is important not to limit a miner’s liability to the security posted for the mine. Unlike BC, in New Zealand there are legal provisions to ensure that public funds are not expended for clean-up costs that exceed the available security.
BC Mining Issue:Legal provisions do not adequately ensure that the government will have access to the necessary mine security funds or will utilize them as required.
Fair Mining Best Practice:Allow the government access to security when a mining company fails to comply with government-issued orders and make the company liable for government clean up that exceeds the available security.
Return of Security
Security is returned to the miner when all legal conditions under the legislation and mine permit are fulfilled to the satisfaction of the Chief Inspector. Although these are strong provisions, when compared to other countries, they are not comprehensive enough. As a result, the burden of reclamation may still fall on BC taxpayers.
Environmental conditions may degrade after mine closure. For example, at the Clinton Creek Mine in the Yukon, the government had to undertake remediation efforts five years after security was released to the miner.
Solutions to these issues may include, for example, a staggered release of security to ensure all potential clean-up costs are covered, and required site inspections before security is released. Public involvement is also important. Many regions require public notice and hearings before security is released.
As with most other provisions in BC’s mining law, site inspections are subject to the Chief Inspector’s discretion and therefore need to be legislated in order to promote clarity and consistency.