The system of bonds paid to ensure disused mines are rehabilitated will soon be reviewed by the NSW Audit Office after concerns were raised as to whether it would work properly.
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The Mercury can confirm that the Audit Office is drawing up the terms of reference for what is likely to be called a Mining Land Rehabilitation Security Deposits audit.
The Audit Office has consulted with stakeholders including industry and environment groups to determine the scope of the audit.
NSW Greens mining spokesman Jeremy Buckingham said there was “widespread concern” that taxpayers may be left to foot the bill as struggling miners move to cut or avoid costs.
“With the coal industry in structural decline and many mines closing, being sold off, or being mothballed, there is growing concern about rehabilitation of mine sites,” Mr Buckingham said.
“The Greens believe there is growing evidence that current rehabilitation bonds are not adequate to cover rehabilitation to a reasonable standard, meaning the rehabilitation will not happen or the financial burden will fall on taxpayers.”
Last month the Mercury reported on a study by green think tank the Minerals Policy Institute that named Wollongong Coal’s Russell Vale mine as among those most at risk of failing its rehabilitation options.
But Dr David Blackmore, director of environmental sustainability at the Department of Resources and Energy, said he was confident there would not be problems at Russell Vale, and rehabilitation bonds were regularly recalculated to stay current.
There is growing evidence that current rehabilitation bonds are not adequate to cover rehabilitation to a reasonable standard
- Jeremy Buckingham
The department had to take enforcement action in March to get Wollongong Coal to pay $1.86 million outstanding on its security deposit. It was paid.
In 2014 the Queensland Audit Office found that state’s rehabilitation bond system, while improving, was unacceptably inadequate – the money held was insufficient, and the rule was rarely enforced, leaving the state exposed to the risk.
A NSW Audit Office spokesman said the audit should be completed by early 2017. “We expect that the scope of the audit will be finalised in the next four weeks and the audit can commence,” he said.