Financial provisioning scheme

About the financial provisioning scheme

The Mineral and Energy Resources (Financial Provisioning) Act 2018 (the Act) came into force on 1 April 2019. The Act established the Financial Provisioning Scheme (the scheme), replacing the prior financial assurance arrangements for resource activities under the Environmental Protection Act 1994 (EP Act).

The purpose of the scheme is to improve the state’s management of its financial risk in the event holders of a resource activity environmental authority (holders) or small scale mining tenure (SSMT) fail to comply with their environmental management and rehabilitation obligations. Over time, the scheme will provide funds to support rehabilitation of abandoned mines and expand research into mine rehabilitation.

The main objectives of the scheme are:

• to provide for holders of authorities to pay a contribution to the scheme fund, or give a surety, for the authorities
• to provide a way to manage the risk to the State of incurring costs and expenses if the holder of an authority or small scale mining tenure does not comply with the holder’s obligations under the authority or tenure
• to provide a source of funds to the State for costs and expenses relating to preventing or minimising environmental harm, or rehabilitating or restoring the environment, or securing compliance with an authority or small scale mining tenure
• to provide a source of funds to the State for:
  • remediation activities in relation to mining activities previously carried out on an abandoned mine site
  • remediation activities in relation to an abandoned operating plant
  • research that may contribute to the rehabilitation of land on which resource activities have been carried out
• to administer payments received by the State under the Environmental Protection Act 1994 for residual risks of land on which resource activities have been carried out.

The Scheme Manager is responsible for administering all SSMT and holders’ financial provisioning on behalf of the State of Queensland.

The Scheme Manager will require:

• SSMTs and holders of environmental authorities with an estimated rehabilitation cost (ERC) below $10 million, to provide surety equal to the ERC for that authority (unless the holder with an ERC between $100,000 and $10 million has an eligible environmental authority and has elected to be in the risk assessment process)
• environmental authorities with an ERC of at least $10 million, to undergo an annual risk category allocation assessment process (unless the holder with an ERC between $100,000 and $10 million has an eligible environmental authority and has elected to be in the risk assessment process). The assessment process will determine whether the holder will be required to provide a contribution to the scheme’s Financial Provisioning Fund and/or to provide surety to the Scheme Manager for that authority.

Who does the Act apply to?

All resource activity holders of an environmental authority.

All holders of a small scale mining tenure permit.

Who is not affected by the Act?

A holder of an environmental authority for a prescribed environmentally relevant activity (e.g. non-resource sites such as landfills, agriculture) provides financial assurance as required by the EP Act.

Guidelines, information sheets and templates

The Mineral and Energy Resources (Financial Provisioning) Regulation 2019 establishes the prescribed insurer formula for determining the contribution to be paid to the scheme’s fund and sets the assessment fees, formula for determining the contribution to be paid to the scheme’s fund and sets the assessment fees.

The Scheme Manager has published the following resources to help holders meet their obligations under the Act.

Guidelines

• Guideline 1 – Forming the Scheme Manager’s opinion – risk category allocation
• Guideline 2 – Assigning an authority to a relevant holder
• Guideline 3 – Requiring surety to preserve the financial viability
• Guideline 4 – Forms of surety
• Guideline 5 – Forming the Scheme Manager’s opinion – deciding the annual review allocation

Information sheets

• Information Sheet 1 – Risk category allocation
• Information Sheet 2 – Realising surety provided by multiple holders
• Information Sheet 3 – Financial institution paying out surety instrument
• Information Sheet 4 – Environmental authority transfers

FAQs

• Annual review allocation day
• Fund threshold
• Prescribed ERC and election notice

Templates

• Financial institution undertaking (non-cash surety template)
• Cash surety deed template

Mandated notification forms

In certain circumstances, the Act requires holders to notify the Scheme Manager using the forms below:

• Form FPS1 – to apply for a proposed changed holder review allocation (under s33 of the Act).
• Form FPS2 – is to give notice that there has been a direct/indirect change of holder for an authority (under s42 of the Act).
• Form FPS3 – to give notice, that production in relation to an authority has ceased (under s43 of the Act).

Changes to the Act – 1 October 2025

In 2022, the scheme was reviewed following the successful transition of assessable environmental authorities (EAs) (Attachment 2). The review confirmed the scheme was operating in line with expectations. It also identified opportunities to improve efficiencies for industry and government along with improvements to the state’s risk position and deeper understanding of the state’s risk exposure.

Scheme improvements

• Prescribed ERC: Increasing the prescribed ERC for risk assessments from $100,000 to $10 million, reducing compliance and administrative burden.
• Risk category allocation: Introducing an additional risk category of ‘Moderate-High’ to better allocate mines to risk categories.
• Prescribed percentages: Changing the prescribed percentages of risk categories appropriately. ‘Very Low’ and ‘Low’ risk category rates remain the same, ‘Moderate’ reduces from 2.75% to 2.25%, and the new ‘Moderate-High’ is 6.5%.
• Fund threshold level: Increase the fund threshold for BBB+ or better credit rated entities to $600 million, increasing availability of finance. However, retaining a $450 million threshold for all other entities that are higher risk.
• Post-transitional arrangements: Providing more flexibility for EA holders that are transitioning to a higher risk category allocation, by introducing the ability to apply for a 1-year hold on having to provide surety and have the Moderate-High risk category apply.
• Annual review: Aligning EA assessments by grouping them by the assessed entity and to realign annual review dates so grouped assessments can be reviewed at the same time.
• Fees: Introducing assessment pathways through the Scheme Manager guidelines to reflect more nuanced assessments. This includes ‘Streamlined’ assessments for those EAs with a mine that is unchanged year-on-year and with an ERC of $50 million or more, incurring a fee 50% less than what they otherwise currently pay.
• Assessment pathways: To support changes to the Act, compressive and streamlined assessment pathways, together with a revised assessment methodology developed and detailed in the guidelines and information sheets.

Advisory committee

The Financial Provisioning Scheme Advisory Committee provides advice to the Queensland Government about funding requests from the scheme fund for:

• remediation/rehabilitation activities at land on which an abandoned mine exists
• research that may contribute to the rehabilitation of land on which resources activities have been carried out.

The committee changes from time to time. The Annual Report contains committee members for that financial year.

Annual Report

The Scheme Manager prepares annual reports that form part of the scheme’s corporate governance framework and fulfils the Scheme Manager’s obligation under section 83B of the Act. The reports are prepared in accordance with the Financial Provisioning Scheme Annual Report Framework.

Read the 2024-25 Financial Provisioning Scheme Annual Report.

View and download previous annual reports from the Queensland Government publications portal.