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Part D: Environment - 38. Environment | 38.8 Reclamation

As a principle, mine closure and rehabilitation are the responsibility of the mining company, in accordance with the polluter pays principle.

These provisions relate to the reclamation obligations of the mineral rights holder to restore land disturbed by mining operations upon closure or cessation of mining operations. Generally, the purpose of reclamation is to improve the post-closure site to a certain designated standard in order to prevent or repair environmental damage at the end of a mine’s life.

A key element of this topic is the planning for closure. A closure plan, with sufficient details, should be part of the permitting process, as with ESIAs. Indeed, it is much better to plan for closure from the outset. If the closure plan is hastily developed in the last years of a mine’s life, the chances for success are dramatically reduced. It is also important to ensure progressive rehabilitation during the life of the mine. Mining laws and regulations should therefore clarify the timing, approval process, and periodic review of closure plans; adapt closure obligations to capacities and of different segments of mining industry (large scale, small scale, artisanal); establish monitoring, reporting and enforcement mechanisms; and require financial guarantees.

Mining laws may refer to internationally accepted guidelines and principles, such as the International Financial Corporation (IFC) standards. As the closure of a mine may have huge economic and social impact, closure plans are not only about environment clean-up and rehabilitation. Specifically, on economic and social impacts, mining laws, together with specifics closure plans, should therefore clearly assign responsibilities to mining companies and to the government. Ensuring coherence between closure plans and national or local development plans is one factor for success.

To ensure that costs associated with future reclamation will be guaranteed in the event the mining company is unable to implement the requirements, government agencies generally require mineral rights holders to provide sufficient financial assurance at the beginning of the mining operation. The need for financial guarantees for mine closure and rehabilitation is not questionable today. Such assurance is typically evaluated on an annual basis to confirm the financial adequacy of the instrument compared to the mine plan. It is important to both governments and mining companies that these financial assurance amounts are realistic and appropriate, with a clear understanding of the process of future adjustment of assurance amounts. The challenge is to design the best form of guarantee that is efficient from both the government’s and the companies’ perspective, while ensuring the implementation of the closure plan. In this regard, the form of the guarantee, its management and the condition of access to funds are as important as the amount of the guarantee. This topic should be addressed to facilitate the potential future re-use of mined lands and to provide governments and communities with certainty that funds will be available for closure and reclamation in the event the mining operator is unable to perform its reclamation requirements.

38.8. Example 1:

Article [_] Issuing of a Closure Certificate

(1) The mineral right holder remains responsible for any environmental liability, pollution or ecological degradation, and the management thereof, until the relevant government agency has issued a closure certificate to the holder.

(2) Within [180 days] of ceasing the mining operations (including lapsing, abandonment, cancellation, relinquishment of any portion of the licensed land or completion of a prescribed closing plan), the mineral right holder must apply for a closure certificate and file a closure plan for governmental approval. The mineral right holder must comply with all aspects of environmental authorization issued in relation to closure.

Article [_] Reclamation and Restoration

Pursuant to the license issued with respect to the mineral right, the mineral right holder shall as far as reasonably practicable reclaim and restore, where applicable, the land disturbed, excavated, explore, mine or covered with tailings arising from its mining operations to its natural state or in accordance with best practices.

Article [_] Financial Provision for Reclamation and Remediation of Environmental Damage

(1) The mineral right holder must furnish during all stages of the project sufficient financial assurances for reclamation which will be reassessed by [Regulating Authorities] on an annual basis. The financial provision may be made by bank guarantee, letter of credit or a trust deed.

(2) Once required reclamation and remediation of environmental damage is completed in accordance with the closure plan and related environmental authorizations, the mineral right holder’s financial assurance obligations shall be considered terminated.

(3) If, at the time of the cessation of mining operations, the [Regulating Authorities] is not satisfied with the financial assurance provided by the mineral right holder or the reclamation work performed in connection with environmental impacts assessed at the time of closure, it may appoint an independent third party to rehabilitate the closed mining or prospecting operation to address any latent or residual environmental impacts.


Drawn from South Africa’s mining law (2002), this provision highlights that closure standards should be practical for assessing the adequacy of reclamation efforts. It is often unrealistic or undesirable to return the land to its pre-disturbance condition (i.e., backfilling an open mine pit).

38.8. Example 2:

Article [_]

(1) The holder of a mining/exploitation right shall carry out rehabilitation and reclamation of mined out areas to the satisfaction of the [Regulating Authority].

(2) There shall be included in an exploration license or a mining lease granted under this Act, a condition that the holder shall submit an environmental restoration plan of the exploration or mining area that may be damaged or adversely affected by his or her exploration or mining operations.

(3) The environmental restoration plan shall include the following:

(a) An identification of the exploration or mining area concerned, its current uses and productivity prior to exploration or mining operations.

(b) A detailed time table of the accomplishment of each major step to be carried out under the restoration plan which may include:

(i) The reinstatement, levelling, re-vegetation, reforesting and contouring of the affected land;

(ii) The filling in, sealing, or fencing off of excavations, shafts and tunnels, or

(iii) Any other method that may be prescribed.

(c)The use to which the land is proposed to be put following restoration, including a statement of the utility and capacity of the restored land to support a variety of alternative uses.

(4) In making a decision whether to accept the environmental restoration plan, the [Regulating Authority] shall take into account:

(a) The steps taken by the mining/exploitation holder to comply with applicable environmental protection standards, existing land use policies and plans and any applicable health and safety standards; and

(b) The consideration that has been given in developing the environmental restoration plan in a manner consistent with local physical, environmental and climatological conditions and best practices.

Article [_] Environmental performance bond

(a) The [Regulating Authority] may require the mineral right holder to execute an environmental performance bond to ensure the fulfilment of all the environmental requirements under this [Act][Code][Law].

(b) The amount of such bond shall depend on the environmental restoration plan and shall reflect the probable difficulty of restoration, taking into consideration such factors as topography, geology of the site, hydrology and re-vegetation potential.

(c) Liability under the bond shall be for the duration of the mining and restoration operations.


Inspired by Uganda’s mining law (2003), this provision offers a more detailed description of the requirements of the environmental restoration plan as provided in the Act (as drafted here based on Uganda’s Mining Code) or any implementing regulations in order to provide certainty to operators on the accepted standards of reclamation and the amount of financial assurance before commitment to a major mining project. Financial assurance requirements can vary depending on the specific country’s preferences and can be adjusted later as circumstances require. Performance bonds are one common type of financial assurance, as provided here. Other types could include self-insurance, letters of credit, a cash trust fund, insurance or a trust set up on behalf of the government to which mining/exploitation holders must contribute on an annual basis (as adopted by Nigeria in its 2007 Minerals and Mining Act).