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  1. 1. CHAPTER 16.7 Closure Planning Evelyn L. Jessup BinghamINTRODUCTION associations, and nongovernmental organizations (NGOs) onIn recent years the minerals industry has recognized the impor- the subject of asset closure planning and financial assurance,tance of sustainable, integrated closure planning. Because of the such as those available through the International Council onfinite nature of ore bodies, all mine and related facilities will Mining and Metals at www.icmm.com.eventually close, and the reputation of the industry is very much The core information provided in this chapter includes adependent on the legacy it leaves. Whether a facility has 10, 20, number of practical tables and lists of information that haveor 50 years of operational life remaining, integrating closure been found to be useful for closure planning practitionersplanning into the mining and metal processing business can who are creating or reviewing best-practice integrated closureresult in value for both the company and the wider community. plans. Activities associated with mineral resource development After a brief overview of closure planning issues and ahave a significant impact on the social and environmental description of what integrated closure planning means, a setaspects of a site. Any site disturbance, even in the early stages of principles for creating a framework for closure planningof a project, creates a legal and financial closure obligation for is presented. Following this, the steps involved in closurethe mining company. Communities, governments, and lending planning are outlined, and detailed components of an effec-institutions are more and more aware of the benefit of good tive closure plan are described according to the closure plan-closure planning and demand it as part of the permitting pro- ning steps. Also presented are a number of common risks tocess for new or expanded operations. be considered in closure planning. Lists of this type are often Closure of an asset, be it a mine or mineral processing useful in preparing for closure risk assessment workshopsfacility, is generally not straightforward and requires deal- with a multi-disciplinary team to assist in the completenessing with the uncertainty of future conditions and events of the review. Finally, a checklist is offered, showing how theconcerning commodity prices, stakeholder demands, regula- detail and contents of a closure plan can change through thetory requirements, environmental conditions, and ore grade. life cycle of a mineral resource development project.Ideally, closure is carefully planned and occurs with the The chapter content is applicable to a wide range of facil-exhaustion of the mineral resource, but it is not uncommon ities and activities including mines, processing facilities, andfor closure announcements to come suddenly with the fall of greenfields and brownfields projects. The concepts and toolscommodity prices or some other unplanned event. Risk-based are appropriate for creating a closure plan for the first time orclosure planning is inclusive of such uncertainty. reviewing an existing closure plan. Closure of an asset is a process that works toward an endpoint that can be referred to as completion. Planning for a COMPLETING THE ASSET LIFE CYCLE—CLOSUREsuccessful closure is a complex, multi-disciplinary task that PLAN OBJECTIVESis essential to minimizing long-term risk for the mining com- A successfully completed closure process is one in which thepany, the environment, and affected stakeholders. land affected by the asset has been rehabilitated to a sustain- able condition. Ideally, in this completed state, the miningCHAPTER ORGANIZATION AND APPLICABILITY lease ownership has been relinquished by the mining com-This chapter is intended to provide basic practical guidance on pany to another land user with minimized continued liability.closure planning. The information presented should be con- This sustainable completed state can only be achieved throughsidered just a first glimpse of the wide-ranging discipline of careful and informed planning over the long term. Closureclosure planning. planning is the responsibility of the mining company, but it In recent years a number of comprehensive and spe- cannot be done in a vacuum. Mining companies must involvecialty documents have been created by governments, industry governments, the communities of which they are part, and Evelyn L. Jessup Bingham, Group Manager, Closure & Waste, BHP Billiton, Melbourne, Victoria, Australia 1753
  2. 2. 1754 SME Mining Engineering Handbookother stakeholders in closure planning to achieve a successful Economic conditions going in the other direction moreclosure outcome. commonly present a serious obstacle to sustainable closure Increasingly, financial institutions lending capital to min- planning and ultimate completion of the closure process. Aeral resource development projects set a high standard for downturn in commodity prices usually results in a lack ofasset closure planning as they seek to maximize value from resources for progressive rehabilitation (if the mine continuesthe project and minimize risk. These institutions have learned to operate) and for closure execution if sudden closure of thehard lessons from the past where poor operational closure asset is announced.practices have resulted in ongoing legacies of water pollution, To minimize the ups and downs of economic cycles andsafety and health hazards, and the resulting public outrage and resource availability, effort on the part of the mining companycontinuing liabilities. Many countries have specific regula- must be made to understand and forecast changing conditionstions concerning closure planning and completion. Currently, that might affect closure planning and execution as well ashowever, there is no overarching world governance body cov- possible changes in stakeholder needs. Closure plans must beering mine and mineral processing facility closure, and there adjusted through time and adequate resources allocated forare still areas in the world where closure regulation is minimal difficult economic conditions. Postmining land use and otheror nonexistent. objectives may need to change according to changes in the External mining stakeholders such as local communities, LOA plan and external factors.conservation groups, and biodiversity advocates are becomingmore and more sophisticated about the outcomes of good and INTEGRATING CLOSURE PLANNING FORbad closure planning practices. Given the opportunity, exter- EFFECTIVENESSnal stakeholders can become partners in closure planning, ulti- A mining company’s commitment to good closure planningmately to the benefit of all. practices will pay off in reduction of liabilities for the com- Good closure planning toward the outcome of sustainable pany and improved reputation with stakeholders. In the past,mine completion requires communication and engagement closure planning has often been a stand-alone activity in thewith stakeholders to develop agreed-on closure plan objec- business, usually done as a one-time effort to meet a regula-tives, which should include the following: tory obligation. It is not uncommon for the asset closure plan to be the • Comply with regulatory requirements or industry-leading responsibility of the environmental function at a site while practice where local regulatory requirements are insuf- the LOA plan is the responsibility of the mine planners and ficient to manage risk. the updates to the closure financial provision are handled • Protect public health, safety, and welfare over the long by the accounting department, whose focus is on meeting term. accounting guidelines. A lack of communication between • Maximize environmental sustainability. these various departments can cause the closure plan scope • Mitigate socioeconomic impacts during and after closure. and details to fall well behind the inevitable updates to the • Provide a reasonable basis for estimating and managing LOA plan and the closure provision carried on the books to be closure costs. out of date with both. • Minimize costs for the mining company, the government, To address closure planning issues and meet business and the public. objectives to manage risk, it is necessary to ensure that clo- • Achieve sustainable land-use conditions as agreed with sure planning is fully integrated in the core business of the stakeholders. asset. As business conditions change, LOA plans change, and • Enhance the reputation of the mining company as a so must the closure plan change. Additionally, the detail and responsible corporate citizen, and ensure that shareholder accuracy of closure plans must change through the life cycle value is preserved. of the asset—starting out as conceptual and progressivelyTiming and how these objectives are achieved through the life becoming more detailed over time. Finally, as regulations andof the asset life cycle is very site specific. Certain types of stakeholder expectations change, the closure plan needs tomines (such as porphyry copper deposits and other hard-rock change. Effective closure plans must be integrated in a num-mines) and mineral processing centers may not allow for any ber of levels including the following:concurrent or progressive rehabilitation or reclamation (for • Integration with the LOA and long-term business plan.the purposes of this chapter, reclamation and rehabilitation The closure plan necessarily links past disturbance, cur-are used interchangeably) during the operating phase because rent operations, progressive rehabilitation, and future dis-the disturbed areas (such as the open pit, tailings impound- turbance planned until the end of asset life.ment, waste dumps, and concentrator buildings) are in con- • Integration with external stakeholder affairs. A focus ofstant use during the operations. Assets of this type may spend closure planning should be engagement with the externalmany decades planning for closure activities that will occur at stakeholders affected by closure. This will include work-the end of the asset life. ing with the government, local community, and NGOs Coal mines, on the other hand, generally have the oppor- to understand their needs and concerns. Interaction withtunity to execute and obtain sign-off on rehabilitation through external stakeholders during closure planning not onlythe life of the asset. However, even projects conducive to pro- results in compliance with regulations but also affordsgressive closure will face challenges associated with life-of- the development of robust closure criteria to support anasset (LOA) plans changing as commodity prices go up and acceptable end land-use and communities that are betterdown. It is not unheard of for coal mines to have to dig up or prepared to support the company when it comes time forcover over well-established rehabilitation because coal seams completion and lease relinquishment.once thought uneconomic are now scheduled to be mined.
  3. 3. Closure Planning 1755 • Integration with all the relevant functional disciplines Table 16.7-1 Closure plan upgrades across life-cycle phases on-site. Closure planning and ultimately the execution of Life-Cycle Phase Closure Plan Class the closure project toward completion will involve senior Projects in study phase Conceptual-level closure plan and cost management, human resources, project engineering, busi- estimate ±50% to 30% ness improvement specialists, environmental managers, Assets with >10 years life remaining Conceptual-level closure plan and cost operations, planning engineers, community and external estimates, e.g., ±30%. Expectation of affairs, legal advisors, risk management, and finance; all progressive improvement in uncertainty are necessary for effectiveness. Commonly, the follow- and cost estimates annual review. ing key roles and responsibilities will be essential to the Assets 10–3 years life remaining Prefeasibility-level closure plan and cost multidisciplinary team: estimates, e.g., ±20%. Expectation of – Technical services provide the engineering design, progressive improvement in uncertainty LOA plan, and rehabilitation plan. and cost estimates annual review. – Project engineers and cost specialists are responsible Assets with 3–1 years life remaining Feasibility-level closure plan and cost for cost estimates, design of necessary pilot tests, and estimates, e.g., ±15%. execution by project management. Assets in closure execution or Execution-level closure plan and cost postclosure estimate, e.g., ±10% – Environmental specialists are responsible for devel- oping closure criteria and performance requirements working with government representatives to meet regulations. • Framework Principle 2: Management of Business Risk – Community specialists are responsible for stakeholder – Closure planning shall include an assessment of all engagement and closure scenario building. risks associated with closure including, but not limited – Finance and accounting personnel are responsible for to, risks associated with provisioning and maintaining closure risk registers. - Postclosure liabilities; – Management is responsible for setting key perfor- - External stakeholder needs, aspirations, concerns; mance indicators and milestones for closure. - Deferral or delay in progressive rehabilitation dur- ing operations; Integrated closure plans are developed, reviewed, and - Uncertainty in environmental, regulatory, or com-updated starting in the LOA concept phase and moving munity aspects;through prefeasibility, feasibility, execution, operation, and - Uncertainty in cost estimations;closure phases of a mineral development project. Throughout - Uncertainty in technical aspects of closure; andthis lengthy period, integration in the key areas will increase - Delay in closure execution.the probability of a closure plan meeting the business objec- – The management of closure risk shall be developed intives upon execution. accordance with formal risk management standards and associated guidance approved by company management.CREATING A MANAGEMENT FRAMEWORK • Framework Principle 3: Accurate Estimates of CostFOR INTEGRATED CLOSURE PLANNING – Closure plans shall be prepared in accordance withIn order to fully integrate closure planning in the business, a project management principles and contain sufficientlong-term commitment to a set of basic principles is necessary detail to determine the cost of closure to the extentfrom senior management. Closure planning is not a one-time necessary to manage closure risk.endeavor but one that takes place over many years or decades. – Closure plans will be progressively upgraded accord-The people involved in closure planning will come and go; ing to the life-cycle stage of the mineral developmenthowever, if the company has adopted a framework of prin- project as shown in Table 16.7-1.ciples, closure planning can proceed and improve through the – Environmental and engineering studies will be per-life cycle of the mineral development project. formed to increase the certainty of closure cost esti- The following basic list of principles should be consid- mates as an investment comes closer to the need toered and adjusted as required for adoption as a company “clo- execute the required closure activity.sure policy” to form a solid framework from which the closure – All closure plans shall include an estimate of the pro-planning team can work over time. vision for closure, in accordance with international • Framework Principle 1: Regular Review and Updates accounting guidelines. – Closure plans shall be maintained throughout the life cycle of all mineral development assets. THE CLOSURE PLANNING PROCESS – Closure plans shall be reviewed annually in con- Whether creating a closure plan from scratch for a greenfield junction with the LOA planning process. Closure project, exploration project, or simply reviewing an existing plans and associated cost estimates shall be revised closure plan for a large, mature mining property, the steps when there is a significant change to the LOA plan, in the closure planning process are essentially the same. The and when there are regulations or factors signifi- level of detail and effort required to develop the closure plan cantly affecting the closure plan and associated cost through this process will vary as a function of site-specific estimates. issues and the life-cycle phase of the project. – Closure planning processes and closure plans and cost Sudden or unplanned closure due to a downturn in com- estimates shall be subject to reporting, audit, and gov- modity price or other adverse business decision may call for ernance procedures, particularly where there is a risk an acceleration of this process and require such things as of material misstatement on financial reports or a sig- interim care and maintenance plans to be implemented while nificant effect on business decisions. the closure execution plan is being finalized.
  4. 4. 1756 SME Mining Engineering HandbookWorkshop Approach project management principles. The engineering costThe process of developing and updating an integrated closure estimate serves as the basis for a number of subset esti-plan should take as much thought and effort as that dedicated mates, including internal business investment valuation,to design and development of any significant project. The accounting provision for financial statements and govern-result of the closure planning, even in the early phases, has the ment financial assurance or bonding. Both deterministicpotential to significantly affect the business and stakeholders. and probabilistic estimates may be generated depend-Closure planning sets the course for years of activities, and ing on the level of uncertainty. Probabilistic techniquesit involves the expenditure of material funds for studies and, such as Monte Carlo simulations may require specialistultimately, closure execution. effort but can very effectively incorporate the uncertainty Because of the multi-disciplinary nature of closure plan- of such items as undefined contamination and cost fluc-ning, facilitated workshop sessions are useful at intervals in tuation. As the site nears closure, specialist demolition,the closure planning process. An internal closure risk assess- salvage value, and remedial experts will be required toment workshop is useful in the beginning to set the context, establish the cost of an executable closure plan.agree on strategy, and explore risks. 6. Establish an action plan for improvement. Effective Workshop sessions with external stakeholders can be integrated closure planning requires improvement in theeffective in building relationships and obtaining input about knowledge base in preparation for the next review cycleexpectations. If available, an expert in workshop facilitation and beyond. This will include further stakeholder consul-can add significant value, keeping the participants on point, tation, engineering and environmental studies, site char-while enabling constructive brainstorming, debate, discus- acterization studies, definition of existing contamination,sion, and challenge. and rehabilitation pilot testing. These actions may require A single point of accountability, a team organizational allocation of significant resources, and therefore a formalchart, and a work breakdown structure and schedule should action plan for improvement establishing schedule andbe developed for the closure planning team to refer to. This budget is necessary.should be updated annually during the regular closure plan 7. Update the closure document and record managementreview. system. The closure plan process represents a significant investment in human and financial resources over manyBasic Steps in Closure Planning years. A readily retrievable archive of the process, theRecommended steps for closure planning are as follows: information used, and the decisions made is essential for annual reviews and audits. 1. Set the context by reviewing background data regula- tions, LOA plans, environmental baselines, and previous COMPONENTS OF THE INTEGRATED CLOSURE PLAN closure plans. Review stakeholders and engage as needed Table 16.7-2 provides a guide to the components of a typical to understand their issues. Review the current status of closure plan organized by the high-level steps taken by the the progressive rehabilitation plan and implementation closure planning team. Because of the site-specific nature of schedule to determine whether the LOA plan, progressive closure planning, components will vary according to many fac- rehabilitation plan, and closure plan align. tors. The list in Table 16.7-2 can be used in a number of ways: 2. Establish closure plan strategy and criteria includ- as a closure planning checklist, a table of contents for a closure ing scope, objectives, assumptions, design criteria, and plan, an update list during the annual closure plan review, or a completion criteria. This sets the basis for all subsequent closure plan audit checklist. steps. It is essential that the closure team reaches agree- ment on the standards and strategy to efficiently complete CLOSURE RISK the planning. Assessing closure risk requires a systematic, structured evalu- 3. Assess risks and evaluate closure options. The closure ation. As mentioned, the risk assessment forms the basis of risk assessment process forms the backbone of inte- the closure plan and cost estimates. The focus of the closure grated closure planning, and therefore a standardized risk risk assessment will be to establish an acceptable risk profile assessment process, such as that developed by Australia for the company and all other stakeholders upon completion and New Zealand (AS.NZS 4360:2004), should be used. of the closure project. Involving the proper set of people with the detailed Materiality of risks will be an important consideration for knowledge of the site is essential to identifying all the the closure team to prevent the closure planning process from risk issues. Standard options analysis techniques that becoming bogged down in unnecessary detail. It is useful for would be used on any large project involving significant the team to establish a materiality threshold at the beginning costs should be applied to ensure sufficient rigor in pro- of the closure planning process as an assumption. This will viding the basis of the preferred closure plan. depend a great deal on where the asset is in the life cycle, the 4. Select a preferred closure plan from the option analy- class of closure plan (concept, prefeasibility, feasibility, etc.), ses to control closure risks at an acceptable level. This and the overall magnitude of the closure plan. step is usually an iterative process with Steps 3 and 5, as For example, a closure team may decide that risk issues cost estimate and the risk profile necessarily enter into identified which have a worst-case cost of addressing less than the decision-making process. The preferred closure plan $200,000 are not material to the process of updating a con- will be adjusted with changes to the LOA plan and other cept-level closure plan that will total more than $100,000,000. changes to the context and risk profile of the site as the The closure planning team may record these lesser risks or annual reviews proceed over time. review them in subsequent updates but not spend valuable 5. Generate robust cost estimates for the preferred clo- time putting them through the full risk assessment and option sure plan in accordance with sound engineering and evaluation process.
  5. 5. Closure Planning 1757Table 16.7-2 Key components of an integrated closure plan Plan Component Description and Comment Closure Planning Step 1 Set the context.1a. Life-of-asset (LOA) plan The LOA plan is the basis of the closure plan. Additionally, the closure plan can affect the LOA plan when the cost and summary and map risk profile of the closure plan is considered. The LOA plan establishes the impacted area and scope of works to be decommissioned, rehabilitated, closed, and released. Summaries of the final configuration of pits, dumps, and plant areas are included in the closure plan. LOA plans necessarily change with changing economic conditions and changing technology. Closure plans should be fully integrated and updated with the LOA plan.1b. Progressive rehabilitation Plans to rehabilitate areas of disturbance back to final configuration during the operating phase (prior to closure execution) plan summary and map are integrated in the closure plan. Progressive rehabilitation plans are integrated with the LOA plan and closure plan, and are reviewed annually. Expenditures for progressive rehabilitation are part of the operations budget and commonly are excluded from the closure plan and cost estimate. A significant closure planning risk is that progressive rehabilitation during operations falls behind schedule and unexpectedly needs to be completed as part of closure execution. Similarly, sudden closure (e.g., due to commodity price downturn) can result in a breakdown in the progressive rehabilitation schedule and an underfunded closure plan.1c. Studies register— A reference list of studies documenting conditions for the LOA plan footprint, pollutant management area, and regional area environmental, cultural, impacted must be established. heritage, and biodiversity Baseline studies and recent reviews of conditions are important in establishing closure criteria. In particular, incorporating conditions the ongoing results of groundwater monitoring, surface water monitoring, and vegetation studies into closure planning is critical. Basis for remedial projects (current and forecasted) and their expected outcome should be reviewed regularly and factored into closure planning.1d. Legal and corporate A register of regulatory/legislative mandatory government requirements that cover the environmental, social, financial, and requirement register legal aspects of the closure plan must be kept up-to-date and reviewed annually. These requirements vary significantly from country to country and site to site, and must be well understood as they become the basis for the absolute minimum criteria for the closure plan to meet. Site-specific permit requirements are specified. Legal commitments to joint-venture partners, financial institutions, or other entities affecting closure planning must be met. A register of company requirements, such as internal, environmental, or community standards and industry-leading closure criteria and practices, must be kept. Distinctions must be made as to which are considered mandatory (as in the case where a constructive obligation has been created by publicly indicating a standard higher than legislative requirements) and which are discretionary.1e. Land and property A register summarizing the site land information impacted by the site disturbance should be created. Property boundaries, ownership register geographic information system data, lease arrangements, deeds, and related obligations must be clearly recorded and reviewed for their impact on the closure plan.1f. Stakeholder analysis External and internal closure stakeholders must be identified; known stakeholders’ needs, concerns, and expectations must be register assessed and considered. Requirements and community expectations in developing overall closure objectives and criteria for postclosure land use and cultural and heritage values must be evaluated. This register is updated as closure planning proceeds through the years to reflect current demographics and changing views as the stakeholder consultation and external affairs management plan (discussed further in step 6b) is implemented. Closure Planning Step 2 Establish closure plan strategy and criteria.2a. Closure boundary and This may be a simple list and diagram of the key elements of the site, established by the multifunctional closure team after scope summary review of existing information. Establishing the boundaries of the closure plan may not be completely straightforward. The closure plan may or may not include such elements as a joint venture or contractor-run coal processing plant. A rail spur on-site may be included in the closure plan at one site, while another site’s third-party-owned railway passing through the site is not included. Intangibles such as the human resources severance plans or a company-sponsored community support trust are to be key elements recorded and clearly included, or not included, in the closure plan to avoid confusion and errors in closure provisions as time goes on.2b. Closure strategy, Site-specific high-level vision, strategy, and objectives, followed by a more detailed listing of supporting assumptions (e.g., objectives, and assumption target closure date, costing basis in-house or contractor), should be established. These are updated as needed during the documentation annual review to reflect any changes in stakeholder and company requirements. The materiality of risks should be established for consideration in the risk assessment for the rest of the closure process.2c. Closure criteria register— Determining closure design criteria and performance indicators is an interactive process that takes form as the closure team design criteria and proceeds through the risk assessment and closure options analysis. performance indicators Examples of specific criteria include depth of topsoil, minimum requirement for slopes to control erosion, and storm criteria for sizing water management structures. The specifics of these items will vary depending on where in the life cycle the asset is, starting out as conceptual when closure is many years away and becoming very specific during the closure execution and postclosure monitoring phase. The closure criteria register should provide a high-level summary of rationale and references for how the criteria were determined (e.g., reference to international engineering standards, site-specific risk control basis, local regulatory mandate). (continues)
  6. 6. 1758 SME Mining Engineering HandbookTable 16.7-2 Key components of an integrated closure plan (continued) Plan Component Description and Comment Closure Planning Step 3 Assess risks and evaluate closure options.3a. Closure risk register The closure plan can effectively be thought of as a set of risk control measures. Documenting the output of the formal detailed assessment of all business, environmental, and social sustainability aspects and risks of closure is critical to the closure planning process. It is essential that risk assessments are reviewed and updated annually or whenever there are major changes in the LOA plan or regulatory requirements. The risk register should document the full range of closure risk, risk rating, and enough background information to enable efficient review and communication for audit. The risk register also serves as the basis of the annual closure plan review. Table 16.7-3 provides a list of examples of common closure risks and the associated closure plan controls.3b. Closure opportunities While risks associated with closure are usually the primary focus of the closure planning team, it is important to identify and register develop any closure opportunities. Postclosure land uses for the large expanses of land typically involved in a mining property should be explored. Industrial parks, emerging carbon sequestration techniques, alternative energy (such as solar and wind power generation stations) may present economic development opportunities. Timber, agriculture, and grazing may be appropriate. Biodiversity preserves and wildlife conservation areas are postclosure land uses that may present long-term opportunities. The community or regional government may have an interest in using infrastructure such as roads, bridges, power plants, and warehouses after operations have ceased. The capacity of a third party to manage these facilities needs to be carefully gauged prior to the release of the infrastructure. It is not uncommon for the mining company to find the liability coming back unexpectedly if the recipient of the infrastructure finds itself unable to bear the maintenance or operating costs. Other common opportunities to evaluate include third-party reprocessing of low-grade ore stockpiles prior to rehabilitation, recovery of metals from postclosure water treatment, and revenue created by salvage value during demolition. Closure opportunities assessment should be evaluated and documented in the same manner as downside risk.3c. Closure option analysis As the closure team works through the evaluation of risks and opportunities, various closure plan options will be generated. summary Formal and informal options analysis will be required to choose the preferred set of activities that become the updated closure plan. As options are considered, objectives and criteria may need to be adjusted, data gaps may be identified, and the interactive nature of closure planning becomes apparent. Concisely documenting options considered will make subsequent reviews and updates more efficient. Closure Planning Step 4 Select preferred closure plan.4a. Postclosure land use and Postclosure land use will be developed and agreed upon with relevant stakeholders (both internal and external) and as the final landform plan result of risk assessment and options analysis. The postclosure land use will have a significant effect on the final landform plan, and both are tied to developing an acceptable postclosure risk profile. Examples of this interaction include reducing erosion risk, where final landform slope angles are minimized; establishing self-sustaining vegetation, where landforms are designed to promote or discourage access for timber or grazing activities; or achieving flora and fauna biodiversity goals. More than one postclosure use may be compatible at the same site, such as a solar panel installation on a rehabilitated waste dump, which may work well with managed grazing. Conversely, postclosure land uses may be at odds with each other or pose unacceptable risk, such as managed grazing vs. biodiversity uses or access to water for grazing animals vs. public safety issues. Landform plans should reflect the postclosure public access situation. Re-contouring of land to deter public access where necessary may be possible in lieu of fencing that requires maintenance. Public safety and long-term environmental sustainability should always be an overriding consideration and must be worked through with applicable stakeholders. The final landform plan should include maps and other documentation that clearly show the final landforms and how they support the postclosure land use.4b. Closure execution plan An adequate description and schedule of closure actions and activities are required. The level of detail included in the closure execution plan will depend on the class of closure plan (conceptual, feasibility, etc.), regulatory requirements, and the company’s internal project management requirements. This plan is sometimes referred to as the annual closure plan update or preferred closure plan and commonly addresses all activities required for closure including • Infrastructure decommissioning; • Remediation of contaminated soils; • Water remediation; • Earthmoving, topsoiling, revegetation; • Social management—community and work force (training, economic development); and • Project management and administration. Attention to completeness is required, as this will provide the basis for the cost estimates. Supporting documentation may include organizational charts, work breakdown structures, and contingency plans. It is not uncommon for an asset to develop and mange multiple versions of a closure execution plan that contains varying levels of detail depending on the whether the audience is community stakeholders who want a high-level summary or the engineering functions needing the detailed plan. (continues)
  7. 7. Closure Planning 1759Table 16.7-2 Key components of an integrated closure plan (continued) Plan Component Description and Comment4c. Postclosure plan It is critical that a schedule of postclosure actions and activities be developed and updated. Following the initial phases of decommissioning and rehabilitation, the postclosure period continues until the mining lease is relinquished or the company is otherwise released of liabilities. This postclosure phase needs to be considered in the risk assessment process. Indeed, it can be a surprisingly lengthy and expensive phase, perhaps continuing into perpetuity at some older more problematic operation sites. Postclosure activities include long-term water monitoring, data analysis, and reporting to company and government. They also include maintenance of remaining facilities, such as fences, water treatment plants, and water conveyance structures; actions required to repair erosion; and other rehabilitation repairs. The project management and administrative activities required for the postclosure period must be included in the plan.4d. Completion plan/mining In most cases, one of the prime objectives of a closure plan is to meet the performance indicators set by government and other lease relinquishment plan stakeholders and to obtain formal relinquishment of the mining lease and sign off that all company obligations are complete. Unfortunately, there are very few examples where this has been successfully accomplished. Developing a mining lease relinquishment plan in the early phases of mine life is intended to give clarity to the process and mechanisms required for completion of closure. Ideally, the plan is developed in conjunction with the formal approval body such as the state or federal government. Attention should be given to the fact that most governments around the world (in both developed and undeveloped countries) do not have adequate procedures to sign off on the relinquishment plan or officially release the company, even when it is clearly demonstrated that the closure criteria have been met. Closure Planning Step 5 Generate cost estimates with sound principles.5a. Deterministic cost estimate Cost estimates are made for the activities that constitute the selected closure execution plan. Typically, a deterministic range and range analysis analysis estimating the range of costs of each activity is captured as line items in a spreadsheet. Cost estimates should follow the standard project management and engineering estimate procedures that would be undertaken for any large-scale, multimillion-dollar projects. It is useful to forecast expenditures for a 30-year period following the targeted closure date to see the larger, long-term picture and to ensure that all costs are captured to avoid underestimating the cost of closure. The closure team will need to review applicable government, accounting, and corporate requirements to decide if a deterministic cost estimate is a sufficient end point or if probabilistic modeling is required.5b. Probabilistic modeling for Probabilistic cost modeling, using various techniques including the Monte Carlo simulation method, can be very effective in expected cost of closure managing the inherent uncertainty of closure cost estimates. Probabilities can be assigned to the cost range analysis, event risk occurrence, and timing of key aspects affecting present value calculations and the like. The results of a probabilistic cost model for closure may satisfy a number of government, accounting, and corporate requirements to report the “expected value” of closure that demonstrates an incorporation of risk management into to the cost estimate. The closure team will want to include the expert advice of probabilistic financial modelers as would be done for any large-project costing effort.5c. Closure cost summary The results of the base cost estimate (whether deterministic or probabilistic) will be manipulated for various purposes report according to specific guidelines. The three most common types of closure cost estimates required are the following: • Business valuation. This all-inclusive cost estimate is used primarily for internal business decisions and follows company- specific investment standards. The closure valuation looks at the LOA disturbance (rather than existing disturbance), integrates progressive rehabilitation, and is usually adjusted to account for salvage value and tax benefits. • Accounting provision. International accounting standards are very specific for determining an acceptable provision to be declared in the mining company’s financial statements. Review of current accounting standards by an accounting profes- sional is necessary to ensure compliance with corporate government requirements such as the Sarbanes–Oxley Act of 2002 in the United States. Generally, provision calculations do not include salvage value, do not allow tax benefits to be recognized, and only address current reporting year current disturbance (rather than LOA disturbance). • Government financial assurance. Guidelines vary greatly country to country and state to state. It is critical that the closure team adequately reviews the site-specific regulatory requirements for calculating financial assurance. Progressive rehabilitation is most often treated as an operating cost and is not included in any of these closure cost estimates. Progressive rehabilitation is budgeted and tracked as any other operational expenditure according to local accounting guidelines. Discount rates are generally applied to all of the above cost-of-closure calculations. Assumptions made to determine present value may vary and should be carefully documented to avoid errors and confusion. Documenting assumptions made and guidelines followed to determine the reported costs of closure is important to avoid confusion in subsequent reviews and to provide a basis for internal and external auditing.5d. Closure plan review and Regular, formal review of the closure plan and associated cost estimates are critical to keeping the closure plan accurate and audit plan effective for managing risk and liabilities and for making sound business decisions. An annual review by the closure planning team, integrated with the LOA plan update, should be scheduled and results documented. Review by an entity outside the closure team can be very helpful due to the complex nature of closure planning and the potential for errors in the risk-assessment process. This review can take many forms, including expert peer review, internal audit, audit by joint-venture partners, or consultant review. The scope and details of the internal and external peer reviews will vary with the level of site-specific business risk and where the mining venture is in the life cycle. As the site nears closure execution, detail reviews and audit of the closure plan and cost estimates become critical to managing business risk. (continues)
  8. 8. 1760 SME Mining Engineering HandbookTable 16.7-2 Key components of an integrated closure plan (continued) Plan Component Description and Comment Closure Planning Step 6 Establish an action plan for improving the closure plan.6a. Closure study plan A schedule of environmental and engineering studies and projects is required to systematically reduce the uncertainty in the closure plan. Examples include piloting wast dump covers, vegetation trials, groundwater studies, waste characterization, and community surveys. The closure study plan should contain sufficient detail on goals and objectives to be effective. The study plan should include estimates of human and cost resources required and should identify where the resources are budgeted.6b. Stakeholder consultation A plan for engaging and informing stakeholders around closure issues should be prepared. Economic development for the and external affairs community postclosure must take place over many years to be effective and should be explicitly addressed in the external management plan affairs management plan. Additionally, planning is necessary to receive sufficient input on postclosure land use and sustainable development. Frequency and range of activity will change over time depending on the life cycle of the asset. Human resources and budgets required should be identified and scheduled. Closure Planning Step 7 Update closure document and record management system.7a. Closure document Closure planning updates will take place over many years or decades and will be subject to audit and regular review. A and record retention formal system with accountability will need to be established for the short and long term. Information gathered during the management system closure planning process should be documented in a manner that allows easy access and change management. Particular attention to effective document retention is required in the postclosure period and following completion and lease relinquishment.Table 16.7-3 Common closure planning risksType Closure Risk Issue Possible Causes Potential Impacts Example ControlsSafety and health Worker injury during Asbestos, exposure to hazardous Injury, loss of life, company Effective health and safety, safety and closure execution materials, inexperienced demolition reputation, financial loss, change management program, use of crew regulatory penalties qualified people Public injury Subsidence of underground Injury, loss of life, company Engineering design eliminating hazard, postclosure workings, open pits, high-wall failure, reputation, financial loss, controlled access, public education, unsecured open voids, standing regulatory penalties monitoring program, maintenance plan waterEnvironment Water contamination Acid rock drainage, metal and Third-party legal action, extensive Long-term water monitoring programs, salt seepage from waste rock/ remediation postclosure financial baseline data collection, preventive tailings/pit/underground loss, relinquishment delay, loss of actions during operations, adequate workings, hydrocarbon soil/water company reputation closure design criteria contamination from poor operations practices, water catchment overflow, erosion, pit lake water quality deterioration Water balance, water Inadequate quantitative water Uncontrolled discharge, legal Baseline climate and water data studies, management balance, poor storm design criteria, action, penalties, contamination quantitative water balance inclusive of climate change flow off site, overflow or failure water quality issues, understanding of of dams, catchments, injury or surface/groundwater interaction, proper loss of life, financial loss, loss of storm design criteria, climate change reputation risk analysis Air Improper air pollution control during Soil contamination off property, Effective air control programs during operation (dust/stack emissions), financial loss, third-party lawsuits, operations and closure execution, decommissioning activities, loss of company reputation, monitoring cover design criteria inadequate cover/vegetation, community complaints improper void management (continues)
  9. 9. Closure Planning 1761Table 16.7-3 Common closure planning risks (continued)Type Closure Risk Issue Possible Causes Potential Impacts Example ControlsEnvironment Tailings and landform Slope failure, visual impairment, Water contamination, financial Adequate baseline studies, rigorous(continued) failure soil loss, storm erosion, vegetation loss, nongovernmental engineering criteria development failure, fauna habitat impaired, organization and community inclusive of ecosystem considerations unsustainable ecosystem, seismic complaints, loss of company and stakeholder desires stability reputation, delay in relinquishment Tailings and waste Geochemistry of rock dumps, Long-term water treatment, Adequate environmental impact disposal tailings. On-site disposal of financial loss studies, qualified expert consultation, hazardous waste, long-term stability engineering criteria development compromised by seismic or erosion events, radiation isolation, unknown hazards in landfill Failure of remedial Poor execution by third-party Financial loss, regulatory penalty, Due diligence of third-party contractors, plan or closure activity contractor, soil or water delay in relinquishment appropriate indemnities and insurance, contamination more serious than independent review of high-risk plans, anticipated, vegetation failure adequate environmental studies, and pilot testingCommunity Employee Union strife, management Company reputation, access to Redundancy/severance planning, retention during decommissioning, qualified employees for closure training programs, incentives for rehabilitation, and postclosure project and future projects retention/hiring qualified personnel Local community Loss of income, real estate Socioeconomic disruption, Proactive community planning over outrage devaluation, population decline, loss poverty; relocation of population; entire life cycle, economic development of tax base, unrealistic expectations loss of emergency, medical, and partnerships, education and regular of mining company viewed as “deep educational services; company information updates to external pockets,” failure of third party to reputation; access to new projects; stakeholders on LOA plan maintain infrastructure handed financial loss; long-term liability over postclosure, safety hazard returns to company postclosureFinancial and legal Government Current regulations not clear, Closure plan inadequate, Engagement of government and requirements change changes over time, sudden changes financial loss, inability to achieve nongovernmental organizations, with change in government party. completion monitoring of regulations, obtaining Common considerations: pit government sign-off incrementally, backfilling, sulfate limits for water participating in industry forum, adjusting discharge, return to original contour, LOA plan as required (including unacceptable postclosure land use consideration of early closure) Loss of reputation/ Contamination of surface water, Financial loss through payment of Thorough risk-based remediation, third-party actions groundwater, air; relinquishment compensation, return of property external review of third parties and of closed property to third party and liabilities after relinquishment, appropriate sign-off, monitoring unable to provide proper care and loss of reputation, environmental programs during operations in closure maintenance; exposure to workers penalties, and other statutory phase and public during operations and penalties closure Inadequate Failure to consider all possible Financial loss, misstatement of Use of standardized risk assessment provisioning risks/contingencies including tax financial report, poor business processes throughout the asset life cycle, consequences. Common shortfalls: decisions audit and other assurance activities, long-term water treatment costs, soil review by legal and tax experts, closure remediation costs, lack of topsoil project planned and executed by and cover availability, inadequate project management professionals estimate of postclosure monitoring time period, inadequate project management, overestimation of salvage value Sterilization of resource Untimely execution of closure Resource not available when Use of standardized risk assessment to commodity price rises evaluate closure decision
  10. 10. 1762 SME Mining Engineering HandbookTable 16.7-4 Life-cycle closure plan comparison checklist Feasibility Planning Closure Execution Phase— Concept Phase and and Execution/Project Decommissioning andLife-Cycle Phase Prefeasibility Study Construction Operating Phase PostclosureGeneral Closure options are A preferred conceptual closure Operation is usually the Following the announcementconsiderations considered in these early plan for the asset is generally longest phase in the asset life by management that operations study phases of an asset. If selected during the feasibility cycle. A life-of-asset (LOA) have ceased, the closure a study phase involves pilot phase. As soon as construction plan is updated annually plan becomes a project to be testing, drilling, or other of the mining asset begins, land and addresses all closure managed according to standard actual land disturbance, a disturbance is created and a liabilities by integrating project management principles. closure plan is prepared to closure plan and closure cost the asset business plan, The closure project does not address any liabilities created. estimate should be in place and progressive rehabilitation end until relinquishment of the regularly updated to accurately plans, and closure activities property has occurred. reflect the closure liability as it to be executed at cessation of is created. operations.Closure plan class Preparation of a conceptual class of closure plan and cost Transition to prefeasibility/ Execution level closure plan and estimate ±50% to 30% to support project evaluation. Expectation feasibility-level closure plan cost estimate, e.g., ±10% of progressive improvement in uncertainty and annual review and cost estimates, e.g., of cost estimates. When asset has less than 10 years of life ±20% to 15% remaining, upgrade closure plan and cost estimate class to prefeasibility/feasibility level.1. Basic closure The following applies to closure planning in all phases of the life cycle: planning actions … Identify fatal flaws in operation plan that would prevent compliance as a result of closure. … Identify information gaps, update plan, and schedule to rectify. … Establish current government and other stakeholder requirements.2. Completion criteria … Identify likely completion criteria. … Establish completion … Refine and implement and exit strategy … Outline completion strategy. criteria and preliminary relinquishment sign-off relinguishment sign- process. off process through studies and stakeholder engagement.3. Stakeholder … Establish stakeholder identification register. … Prepare, maintain, and … Implement communityengagement … Identify stakeholder issues. implement community relations plan focused … Outline concept of how stakeholders are to be engaged. relations plan that includes on decommissioning, community consultation postclosure, and completion with respect to closure issues. issues. … Confirm community acceptance of closure actions for completion.4. Closure risk … List closure risks identified in order of priority. Formally assess … Conduct formal qualitative closure risk assessments. management top closure risks to avoid fatal flaw issues. … Establish and update a documented closure risk register.5. Closure plan cost … Document basis of closure cost estimates. estimate … Document use of deterministic and probabilistic methods used. … Confirm that closure cost estimates are risk based and clearly tied to closure plan, i.e., expected value at the appropriate accuracy level for risk management.6. Government … Prepare an overview of … Generate a register listing … Generate a register … Obtain formal acceptance requirements. requirements and high-level listing completion criteria for and implement the plan for compliance. requirements with plan, relinquishment sign-off schedule, and cost for process. compliance.7. Environmental … Identify baseline issues … Implement baseline study plans fit for purpose. Compile information and use to plan for baseline for issues including preexisting additional work as needed. affecting closure contamination, sensitive ecosystems, and biodiversity.8. Postclosure land … Describe current land use. … Determine detailed land … Include postclosure land- … Document how postclosure use … Conceptualize postclosure capability/postmining/ use goals when LOA land-use goals are met. land use for project and postclosure land-use and closure plan are alternatives. alternatives. integrated into business. … Identify land tenure risks … Discuss postclosure land- … Progressively evaluate and issues for closure. use alternatives with rehabilitation against … Plan for additional stakeholder engagement. final land-use status information needed. … Prepare a preliminary (species regrowth, fauna … Plan for stakeholder LOA plan that includes assemblages, etc.). engagement on postclosure land-use issues. … Validate land-use status postclosure land use. against closure completion criteria. (continues)
  11. 11. Closure Planning 1763Table 16.7-4. Life-cycle closure plan comparison checklist (continued) Feasibility Planning Closure Execution Phase— Concept Phase and and Execution/Project Decommissioning andLife-Cycle Phase Prefeasibility Study Construction Operating Phase Postclosure9. Water management … Describe current surface … Prepare a conceptual … Clearly define and … Implement closure water and groundwater status. water management plan document water management, remediation … List broad closure water to address on- and off-site completion criteria. plans. management goals. risks including … Progressively update … Decommission and/or … Identify on-site and off-site • Surface and current water status report rehabilitate any water water-related risks. groundwater, including facilities (wells, boreholes, … Establish storm design • Impact on quantity, and • Surface runoff patterns, dams, canals, diversions, criteria. • Impact on quality. • Storm sizing criteria, etc.) that are not part of … Finalize landform drainage • Aquifer delineation, postclosure land use. plan. • Surface and … Monitor and evaluate … Generate a preliminary groundwater quality progress toward final monitoring plan. and quantity. hydrology and water quality … Assess on- and off-site risks. … Evaluate and validate completion criteria. … Determine postclosure status against closure goals including final use completion criteria. and completion criteria for … Schedule and cost dams and voids. pollution prevention and remediation plans. … Schedule and cost monitoring plans. … Quantify final landform and drainage patterns (including creek diversions, dams, future flooding impacts).10. Plant/ … Identify major … Summarize demolition … Progressively update … Perform decommissioning. infrastructure infrastructure and define and decommissioning decommissioning plans … Perform remediation if footprint. quantities. and cost estimates. necessary. … Prepare a conceptual … Identify off- and on-site … Monitor salvage value … Monitor and evaluate decommissioning disposal needs. and adjust closure cost progress toward completion. plan including what … Establish rehabilitation plan estimate as required. infrastructure will remain for footprint and adjacent in place postclosure. areas.11. Overburden/ … Describe quantity and … Generate LOA plan to … Revise and update LOA … Perform rehabilitation. rock piles, tailings quality of material. include plan in conjunction with … Perform remediation if dams, open-pit … Conceptualize alternative • Final slope angles; development of closure necessary. features locations and forms • Structural safety defined plan annually. … Monitor and evaluate identified. for tailings and rock/ … Progressively monitor final progress toward completion. … Conceptualize disposal overburden piles; voids (including borrow and closure methods • Water and sediment pits and quarries), and described. control features; report against closure … Quantify volumes. • Structural stability goals. … Quantify types including including settlement, … Regularly address gaps acid generation potential. subsidence program; found in integrated … Prepare topsoil stripping • Facility closure LOA plan, progressive and management plan. and rehabilitation rehabilitation plan, and … Prepare preliminary LOA methodology closure plan. plan for dumps, tailings, (impoundment capping, pit features. revegetation, final void); • Topsoil and other cover material plan; • Rehabilitation schedule; and • Configuration.12. Waste and … Identify types of chemicals … Generate chemical … Track waste generation … Implement soil chemical used. spill prevention and and annual disposal decontamination plans. management … Identify types of waste to management plan. capacity against plan. … Implement closure waste be generated. … Develop waste … Quantify accumulation of disposal plan for project. … Describe general management plan. waste on-site. … Monitor and evaluate management and disposal … Develop spill prevention … Develop soil progress toward completion. plan. and response plan. decontamination plans. … Quantify chemicals. … Develop rehabilitation plan … Document disposal plans … Quantify waste generated. for on-site waste disposal for cumulative waste over facilities. operating life and at closure. (continues)
  12. 12. 1764 SME Mining Engineering HandbookTable 16.7-4 Life-cycle closure plan comparison checklist (continued) Feasibility Planning Closure Execution Phase— Concept Phase and and Execution/Project Decommissioning andLife-Cycle Phase Prefeasibility Study Construction Operating Phase Postclosure12. Waste and … Identify gaps between … Within 3 and 5 years of chemical generation and disposal projected management management capacity. decision to close, finalize (continued) … Identify off-site disposal detailed closure waste facilities. disposal plan.13. Haul roads and … Identify road system. … Formalize completion … Perform decommissioning access roads … Identify roads to remain at closure and likely completion criteria for roads to and rehabilitation of roads criteria. remain at completion of that will not be retained. … Conceptualize rehabilitation plan for roads. closure. … Configure roads to be left … Develop progressively upon completion of closure more detailed for long-term use. rehabilitation plan for … Perform remediation if roads. necessary. … Perform progressive … Monitor and evaluate decommissioning of roads progress toward completion. where feasible.14. Air quality … Identify baseline air … Conduct baseline air … Develop a mitigation plan … Complete surface treatments management quality status. monitoring to establish air for surface treatments and revegetation to meet … Describe project risks quality key performance and revegetation to air quality key performance including air contaminant indicators. reduce dust and odor indicators at completion. impact off- and on-site at … Prepare air-quality in accordance with key closure. management plan for performance indicators at minimizing on- and off-site completion. impact.15. Underground … Describe subsidence- … Identify underground … Develop underground … Implement project plan workings control issues. workings areas. decommissioning plan. for decommissioning … Describe water … Prepare LOA subsidence … Develop long-term underground workings. management issues. management and subsidence management mitigation plans. plan. … Prepare LOA underground water management plans. Closure risks are very site specific and must be assessed to prompt discussion and develop a high-level checklist toby a cross-functional team familiar with the site and issues. ensure that closure plans contain the correct level of detail asHowever, there are a number of risks issues that are com- the mineral development project progresses.monly encountered. Table 16.7-3 may serve as a helpful guideto brainstorming site-specific closure risks. ACKNOWLEDGMENT This chapter was drafted with the assistance of Gary Bentel,LIFE-CYCLE CLOSURE PLAN COMPARISON geotechnical manager, BHP Billiton.Table 16.7-4 provides a comparison of how the closure planshould change as the mineral development project moves REFERENCEthrough the life cycle from a study project and feasibility plan AS/NZS 4360:2004. Risk Management. Sydney, NSW:into the lengthy operating phase and ultimately to the closure Standards Australia International; Wellington: Standardsphase. The table is not meant to be exhaustive but can be used New Zealand.