To better understand the details of the bonds and the Trust, it is necessary to also understand the meaning of the terms closure and post closure.
Closure commences once mining stops, and closure continues for a number of years.
Closure is complete when 'the elements of the entire project have been demonstrated by the Company, to the satisfaction of the appropriate regulatory authorities, to have reached a safe, stable, self-sustaining, rehabilitated state.'
A safe, stable, self-sustaining rehabilitated state is defined to have been reached when:
- the pit slopes are shown to be stable
- any water discharging from the site, and any groundwater under the site, will be of a quality that will not affect aquatic life, or other users of the water resource
- the structures are shown to be stable
- all revegetation is complete, and monitoring demonstrates that the site is sustainable.
Because it will take five years for the lake to fill, and another five years of monitoring of the lake water quality will be required, it is assumed that the closure period will be ten years in duration. In practice, much of the site will have been rehabilitated and will meet the closure objectives well within that ten year period.
Once closure of the site is complete, the post closure period commences. At this point in time, a charitable trust known as the Martha Trust will manage the Tailings Storage Facilities and Water Treatment Plant and take title to the land upon which they stand. The Trust will also take title to the proposed park adjacent to the lake, and maintain it for general use by the public. The Trust will also be responsible for the monitoring and maintenance of the lake. A sum of money will be handed over by the Company, and the interest generated from that money will allow the Trust to manage, monitor and maintain the land, and provide the necessary insurance cover.
The Trust will be responsible for maintaining the land and facilities in the long term, and will carry out all necessary monitoring and maintenance.
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1. Operational period.
Mining operations continue where possible, disturbed areas are progressively rehabilitated.
2. Closure Period.
Waihi Gold Mining Company rehabilitates remaining disturbed land while continuing to monitor and maintain the site.
3. Post Closure Period.
The Trust takes title to land upon which the tailings storage facilities and Water Treatment Plant stand and the park adjacent to Martha Lake. The Trust monitors and maintains the land in perpetuity and obtains insurance cover where necessary.
The Bonds
The Company is required to have in place a rehabilitation bond to cover the cost of closure of the project whenever that may occur, to leave the site in a safe, stable, and self-sustaining rehabilitated state. The quantum of the rehabilitation bond is reviewed annually, and the rehabilitation bond is released once closure of the site is completed. The rehabilitation bond provides certainty in that, even in the unlikely event that mining finishes early, and the Company walks away from the site, funds will be available to ensure that rehabilitation is completed.
A capitalisation bond is also required. This bond ensures that a sum of money will always be available to allow the Trust to carry out its activities, even in the unlikely event that mining finishes early, and the Company walks away from the site.
The Residual Risk Assessment
Once closure is complete, a sum of money will be handed over by the Company to allow the Trust to carry out its functions, and the capitalisation bond will no longer be required. This sum of money will generate interest annually, and this money will be sufficient to allow the trust to manage, monitor and maintain the site. In addition, the Trust will be able to take out the necessary insurance cover.
In designing the project, the risks have been identified, and where possible, the risks have been minimised by allowing for them in the project design. For example the pit slopes and the tailings storage facilities have been designed to achieve long term stability, and the risk that remains is minimal. It is termed the 'residual risk'.
A residual risk assessment has been undertaken to determine what risks remain once closure is complete, and to determine the costs of remediation and/or clean-up, in the unlikely event of a problem. Some risks are insurable, and sufficient money has been put aside for insurance purposes. Some risks are not insurable, and the costs of dealing with the consequences of those risks are taken into account in determining the quantum of money that the trust needs to carry out its tasks.
Financial Provisioning
While the bonds are in place to ensure that sufficient funds are always available to ensure that rehabilitation and closure are always provided for, in practice the Company does not intend to walk away from the site. Indeed, if it did so, its reputation would be harmed and it is likely that other projects around the world would be detrimentally affected by such a decision. In some cases, consents to mine other deposits may be declined.
The Company will need to pay the costs necessary to carry out rehabilitation, and to fund the Trust. For this reason the Company sets aside an amount of money each year to ensure that the costs at the end of the project are provided for while the mine is operating.
Annual Reviews
The bonds and financial provisioning are reviewed annually. Up to date information on the bond quantums, and the amount of money set aside for financial provisioning is available.
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