On 7 September 2017, the Queensland State Government announced that new rules relating to land disturbed by mining would be introduced and be effective from 1 July 2018.
The new rules are yet to be released to the public, however, it is understood that they will relate to two proposed reforms which aim to ensure project operators meet the cost of rehabilitation, namely:
- The introduction of new rehabilitation requirements for project approvals which will focus on progressive rehabilitation over the life of a mine; and
- The creation of a Financial Provisions Scheme to replace the existing financial assurance arrangements for resource activities.
In May 2017, our Partner, Damian Roe and Solicitor, Alyce Nielsen identified five things you need to know about the Queensland Government's proposed financial assurance and rehabilitation policy following the review by Queensland Treasury Corporation of Queensland's existing financial assurance framework.
Further details on the proposed reforms have now been revealed in the Financial Assurance Review – Providing Surety discussion paper. The discussion paper reveals that:
- Resource companies would either make a payment into a fund to cover potential future clean-up costs or be required to provide a surety.
- The contribution amount will be decided by the Scheme Manager. The amount will be based on the full estimated cost to rehabilitate the land with costs able to be minimised where the project operator progressively rehabilitates disturbed land and reports on achieving certain milestones.
- A feature of the Financial Provisions Scheme will be a pooled rehabilitation fund able to be accessed by companies with a low risk of defaulting and projects deemed to be a lower risk. High-risk operators and projects are unlikely to be eligible for the pooled rehabilitation fund and may instead need to provide a surety to government that in the event of default, the outstanding rehabilitation costs will be met.
- Insurance bonds are identified as a potential new form of surety, in addition to cash or bank guarantees.
- Administration costs of the Scheme Manager will be met equitably by all participants in the Financial Provisions Scheme.
Written submissions in respect of the Financial Assurance Review – Providing Surety discussion paper close on 22 September 2017 and can be made by emailing financial.assurance@treasury.qld.gov.au
Further discussion papers are expected to be released on the Queensland Treasury website over the next 12 months. We will continue to track the progress of these reforms.
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