About the financial provisioning scheme

On 14 November 2018 the Queensland Parliament passed the Mineral and Energy Resources (Financial Provisioning) Act 2018 (the Act).   On 1 April 2019, the Act will come into force and will replace the existing financial assurance arrangements for resource activities under the Environmental Protection Act 1994 (EP Act) with the Financial Provisioning Scheme (the Scheme). The legislation also amends the EP Act to require mining companies to develop Progressive Rehabilitation  and Closure Plans.

The Scheme will be administered by the Scheme Manager, a statutory officer supported by Queensland Treasury.  The EP Act rehabilitation amendments will commence later in 2019 and more information can be found at the Department of Environment and Science’s (DES) website.

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 or small scale mining tenure (SSMT) (holders) fail to comply with their environmental management and rehabilitation obligations.  Over time, the scheme will also provide funds to support rehabilitation of abandoned mines and expand research into mine rehabilitation.

The scheme manager will be responsible for administering all holders’ financial provisioning on behalf of the State of Queensland.   To enable this, all holders and SSMT financial assurance (called surety in the Act) held by the DES and the Department of Natural Resources and Mines (DNRME) will be transferred to the Scheme throughout April 2019.

Under the Scheme:

  • SSMTs and holders with an estimated rehabilitation cost below $100,000 will continue providing surety and will not be part of the annual risk category assessment process
  • holders with at least $100,000 in estimated rehabilitation costs will be transitioned across to the Scheme Manager risk category assessment process over three years. 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.

Regulation, Scheme guidelines and information

In February 2019, the Governor in Council approved the Mineral and Energy Resources (Financial Provisioning) Regulation 2019 (the Regulation).  The Regulation establishes the prescribed insurer, formula for determining the contribution to be paid to the Scheme’s fund and sets the assessment fees.

The following revised information sheets and revised draft guidelines are available to assist you in understanding the processes for Scheme commencement.

After appointment, the scheme manager will finalise the scheme guidelines and processes.

Who is affected by the changes?

All resource activity holders of an Environmental Authority, even if you don’t currently have a financial assurance condition or have not given financial assurance before.

All holders of an SSMT will be affected by the changes, to varying degrees.

Your existing financial assurance will be transferred to the Scheme throughout April 2019.  There is no fee or cost to you on commencement and you do not have to do anything at the time of transfer.

Who is not affected by the changes?

A holder of an Environmental Authority for a prescribed environmentally relevant activity (e.g. non-resource sites such as landfills) will continue to provide financial assurance as per the current financial assurance arrangements under the EP Act.

What happens next

Existing financial assurance requirements and policies will remain in effect until commencement of the new scheme.

The Scheme Manager will contact holders to let them know once the financial assurance has been transferred from DES and DNRME into the Scheme.  Then, over the next three years, the Scheme Manager will progressively contact holders with an ERC of $100,000 or more to gradually transition them into the risk category allocation process.

In the meantime, if you would like information please read the Transitional Arrangements information sheet

Contact

Contact DES for all enquiries about your Authority, including any questions about the ERC for the Authority:

Petroleum & Gas Business Centre

Telephone: 07 3330 5715

Email: EnergyandExtractive@des.qld.gov.au

Minerals Business Centre

Telephone: 07 4222 5352

Email: ESCairns@des.qld.gov.au

Coal Business Centre

Telephone: 07 4987 9320 5

Email: CRMining@des.qld.gov.au

Small Scale Mining

Contact the Small Scale Mining Assessment Hub for all enquiries in relation to your SSMT:

Telephone: (07) 4987 9350

Email: SSMHub@dnrme.qld.gov.au

For scheme matters, please email fps@treasury.qld.gov.au or phone the Financial Assurance Framework Reform Program on 07 3035 3551.

For further information about mining rehabilitation reforms please visit https://www.ehp.qld.gov.au/management/env-policy-legislation/mining-rehabilitation-reforms.html

For further information about the whole reform project please visit https://www.treasury.qld.gov.au/growing-queensland/improving-rehabilitation-financial-assurance-outcomes-resources-sector/