Undoubtedly, an investor or a director of a mining company wants to see a successful mine closure.  Successful in the sense that the mine closes at the destined life-of-mine (LoM) and that the physical, biophysical, social and socio-economic relinquishment criteria are well defined, achieved and or in the process of being executed. Also desirable is that financial provision for the closure process is in check, accessible and subject to budgetary controls. Further, that government and other shareholders’ expectations are known is appealing as are all options related to repurposement of land and infrastructure, including aspects such as third-party handover, land end-users and salvage values having been explored and conceptualized accurately into the closure plan, ultimately allowing the investor to “walk away” and reinvest elsewhere.

Mine closure is a rather elusive mining phase, more so on mining projects where post mining impacts, latent and residual, are most likely to manifest, which might influence or affect the final land use objective. These are typically related to control of extraneous water, acid mine drainage and/or seepages, groundwater and/or hydropedological contamination plumes, subsidence and the long-term stability of tailings and or waste rock facilities. Complex social or socio-economic structures, multiple surface rights, first right of refusal agreements as well as integrated tenement and servitudes and the presence of sensitive ecological zones will also complicate the closure strategy.  Further to the above, a mine might be subject to a variety of legal requirements for closure, typically, in South Africa, associated with the MPRDA, NEMA, Waste Act and Water Act requirements. Other complications might include the need to transfer certain tenements such as water rights, access routes and or secondary services including electricity supplies, water lines, sewage lines and or treatment plants to end-users.

Consequently, these internal and external factors, as highlighted above, require accurate and in-depth analysis. They are also best contextualized with insights and inputs from the mining right holder so that the closure vision and objectives are well conceptualized. These conceptual closure objectives will in turn accurately influence the assessment of closure risks prior to the development of a mining site specific annual closure plan and the final rehabilitation plans as required by the South African Financial Provision Regulations.

Closure risk should be assessed on at least two levels. Firstly, to screen out closure risk typically associated with a specific closure domain, which forms the basis of the closure risk response strategy that is able to integrate with the RSIP (Rehabilitation Strategy Implementation Plan).  

Thereafter, based on the planned closure activities to identify and rank the physical, social and biophysical closure risks in terms of probability and extent from which risk responses are derived.  The nett result is a risk assessment which assessed the holistic closure risk, with practical consideration of closure activities. 

It is therefore a combination of the annual closure plan, the final closure plan and the closure risk assessment which culminates in the financial liability and provisions requirement, ensuring full integration and institutional accuracy.

Based hereon, a high level of dependency exists between the closure plan and the mine works plan, particular that mining volumes over time (run-of-mine / waste / slurry / mining area disturbed etc) are well understood and can be projected over the LoM toward a futuristic provision’s assessment.  

A high level of accuracy is also required in the use of integrated market related unit rates (contractor rates) which considers variables such as diesel 
price (inland vs coastal), machine hour rates, labour hour rates and material cost. The level of risk aversity in a company will affect the manner of risk response and provision, with it being possible to iterate high and low costs to achieve the most likely cost of a risk control, supported by qualitative experiential inputs.

South Africa is at the dawn of a new form of financial provision, most likely one which will require, as a minimum, a risk-based approach employing market-related rates and seeking an alignment of closure planning with mine work planning to reduce overall exposure annually so as to establish achievable final closure objectives. In this lies opportunity for the investor and it is with this 
that ENVASS can provide a value proposition. 

This change in provision brings about high levels of uncertainty, particularly regarding the financial aspects and the affect that this will have on organizations’ bottom lines.  However, it also provides opportunity to dissect and refine the closure plan, to reprioritize closure objectives and to seek out alternatives (such as transfer, resale, repurposements, alternative end land uses) which might not have been as obvious in previous provision models used in South Africa.

Our team of professionals have been servicing and unpacking mine closure planning and execution programmes for various large, small, listed and non-listed mining right holders in South and Southern Africa and can be of service to you.