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Financial assurance and rehabilitation in the resources sector

Progress on reforms

In response to the findings of the Government’s review of Queensland’s financial assurance framework, the Queensland Government is working to ensure that reform of the current financial assurance and rehabilitation arrangements for the resource sector protects the State’s finances while achieving the best balance between a viable resources sector and the environment. The reform package proposes to deliver:

  • a higher level of environmental performance
  • rehabilitation investment in the State’s resources industry
  • better protection of the State’s financial interests.

The Mineral and Energy Resources (Financial Provisioning) Act 2018 (the Act) commenced on 1 April 2019. The Act replaces previous financial assurance requirements under the Environmental Protection Act 1994 (EP Act) with the Financial Provisioning Scheme (the Scheme).

The Scheme will reduce the financial risk to Government in the event a holder of a resource authority or small scale mining tenure (holder) fails to meet their environmental and rehabilitation obligations.  Over time, abandoned mines will be rehabilitated and rehabilitation techniques will be improved through grants provided from the Scheme’s Financial Provisioning Fund.

The Act also amended the Environmental Protection Act 1994 (EP Act) to require mining companies to develop Progressive Rehabilitation and Closure Plans. Those reforms commenced in November 2019 and help achieve the first major milestone of the Government’s broad reforms to improve rehabilitation of mined land on a progressive basis, rather than at the end of a mine’s life.

While this milestone has been met, further reforms are still occurring and these initiatives are outlined below.

Managing residual risks in Queensland

The Department of Environment and Science released the Managing residual risks in Queensland discussion paper on 19 November 2018. The discussion paper outlined a range of proposals to support implementing the residual risk framework in Queensland.

This discussion paper responded to findings of the Government’s review of Queensland’s financial assurance framework. Supplementary work (Framework for Queensland’s Residual Risk in the Resource Sector) was undertaken by Queensland Treasury Corporation to support the Government with development of this discussion paper. The discussion paper provided a number of proposals including:

  • principles to be used in developing a standardised risk assessment methodology
  • two options to assist with the estimation of post-surrender costs:
    • a calculation tool to be used in most circumstances
    • an expert panel to be used where the tool is not appropriate
  • clarification of payment requirements
  • identification of the need to record post-surrender management activities including how these could be communicated to land owners
  • identification of key roles in the post-surrender management of land and funds.

A summary of the discussion paper outlining these proposals is provided for your convenience.

The discussion paper closed for comment on 1 February 2019. The Department of Environment and Science has considered all public submissions received and the results have been summarised in the Queensland Government Consultation Report – Managing Residual Risk in Queensland Discussion Paper.

Departmental representatives will continue to engage with stakeholders on key components of the residual risk policy as it progresses.

Achieving improved rehabilitation outcomes for Queensland mines

The Queensland Government Consultation Report: Abandoned Mines and Associated Risks has been released.  This report outlines the results of consultation on two discussion papers (see discussion papers closed below) on improving outcomes for abandoned mines and other proposals to reduce the financial, safety and environmental risks for the state.

In response to feedback on these discussion papers, the Queensland Government will progress reforms that increase:

  • the scrutiny of the financial and technical capabilities of a resource authority holder when there is a change in ownership; and
  • the state’s oversight of resource sites that enter into care and maintenance (i.e. ceasing production for six or more months).

In addition, to inform and guide the future management of the State’s abandoned mines, the Queensland Government has published the Abandoned Mines Management Policy. This policy details the commitment to managing abandoned mine sites so that they are safe, secure, durable and, where possible, productive.

The Queensland Government will also broaden the powers for remediating abandoned mine sites and increase transparency and accountability in the management of these sites.

The consultation report is available under the Stakeholder consultation reports heading below.

More information

Refer to the following websites which also include contact details for the respective agencies:

Background

A review of Queensland’s financial assurance framework (PDF 1,570 K) in November 2016 found that current resource sector financial assurance arrangements could be improved.

The review recommended a package of reforms to deliver positive environmental outcomes, improve rates of site rehabilitation, and ultimately reduce the amount of rehabilitation required at the end of a resource site’s life cycle.

The package of reforms includes:

  • reforming the current resource sector financial assurance framework
  • improving mine rehabilitation in Queensland
  • expanding the range of surety providers available for the provision of financial assurance
  • improved management of sites in care and maintenance
  • expansion of the abandoned mines program to improve management of legacy issues
  • review of existing approval conditions on the sale of resource assets
  • improved data analysis, information systems and governance framework
  • residual risk policy development.

More information on the review and its findings is available in the Review of Queensland’s financial assurance framework (PDF 1,570 K).

The Queensland Government provided in principle approval to implement the reforms outlined in the review. A project management office was established in Queensland Treasury with representatives from the Department of Environment and Science and the Department of Natural Resources, Mines and Energy to consult with stakeholders and progress implementation.

Discussion papers closed Date closed
Financial Assurance Review – Providing Surety22 September 2017
Financial assurance framework for reform 15 June 2017
Better Mine Rehabilitation for Queensland 15 June 2017
Achieving improved rehabilitation for Queensland: other associated risks and proposed solutions16 July 2018
Achieving improved rehabilitation for Queensland: addressing the state’s abandoned mines legacy 16 July 2018
Managing residual risks in Queensland 1 February 2019
Draft Progressive Rehabilitation and Closure Plan Guideline and Approved Form21 June 2019
Stakeholder consultation reports
Consultation Report – Managing Residual Risks
Consultation Report – Abandoned Mines and Associated Risks
Consultation Report – Financial Assurance Framework Reform
Consultation Report – Better Mine Rehabilitation for Queensland
Consultation Report – Financial Assurance Framework – Providing Surety
Last updated: 7 March 2024