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Rehabilitation of land

Under the Mining Act 1971 (the Act) the holder of a mining tenement is responsible for the rehabilitation of land disturbed by mining operations. The Department for Energy and Mining (DEM) is responsible for ensuring financial liabilities from unrehabilitated mining activities do not become the responsibility of the people of South Australia. The Act provides a mechanism to ensure there are sufficient funds set aside to meet these potential liabilities in the form of financial assurance.

Tenement holders are required to operate mining operations in accordance with an approved operational program. The programs must include information about the mining operation and set out operational controls to achieve appropriate mine completion outcomes to support the rehabilitation of land affected by mining operations.

The setting of a bond by the Minister under section 62, and the establishment of the extractive areas rehabilitation fund (EARF) under section 63, of the Act provide a surety mechanism to protect the state from assuming post mining rehabilitation liabilities.

Neither the lodgement of a bond nor the existence of the EARF negate the need for a tenement holder to meet their legal obligations relating to rehabilitation of disturbed land under the Act.

The Olympic Dam operation is authorised by the Roxby Downs (Indenture Ratification) Act 1982 and is not subject to the bond provisions of the Mining Act.

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Financial assurance for mineral tenements

The bond to be provided by the tenement holder is determined to be the value of 100% of the estimated rehabilitation liability. The acceptable form of bond is:

  • cash
  • an irrevocable unconditional bank guarantee with no end date, or
  • an irrevocable unconditional insurance bond with no end date.

Operators are required to undertake progressive rehabilitation over the life of the exploration or mining operations, hence the maximum liability may be at an earlier stage of development rather than at mine closure. The rehabilitation liability estimate should be the reasonable third party costs of undertaking the rehabilitation strategies covered by the approved program for environment and rehabilitation (PEPR) and include costs for project management, inflation, normal project variation, and contingency provision for risk associated with the strategies and uncertainty in the cost estimates.

The tenement holder may apply for the return of the bond once all completion outcomes as detailed in the approved PEPR have been achieved and demonstrated to DEM. Should the tenement holder fail to meet their rehabilitation obligations the Minister may, at his discretion, use up any portion of the financial assurance to meet the obligations.

The rehabilitation liability of South Australian mines is reviewed in line with the Department’s review program.

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Rehabilitation liability estimation calculator

DEM has developed a spreadsheet calculator for tenement holders to use to estimate the rehabilitation liability. DEM will review the estimate prior to setting the final bond. The calculator consists of a series of rehabilitation components with a number of activities associated with each component. Not all components are used for every operation. Each activity has a unit cost with the operator to add in the number of units for that activity. There is sufficient flexibility to allow individual operators to introduce alternative activities and rates that may be applicable to their operation. Verification is required if alternative unit cost rates are proposed.

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Contact

For more information about the extractive areas rehabilitation fund contact:

Mining Regulation Branch
Phone: +61 8 8429 2385 
Email: DEM:MiningRegRehab@sa.gov.au

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