Australian tax payers could face mine clean up bills, as miners pocket government rehabilitation funds
Mine closures across Australia are leaving taxpayers with the clean-up bills, after a $1billion Governmental cash injection has backfired, critics say.
Western Australia had invested $1billion in a bid to cushion miners from falling commodity prices, but more than 70 mine closures could expose the taxpayer to the risk of footing the bill for hundreds of millions of dollars in unfunded or underfunded liabilities.
Bill Johnston, State lawmaker, believes that some miners took the cash return only to collapse or suspend operations almost immediately, leaving the state to face potential clean up bills.
“Too much money was reimbursed too quickly and there's a risk that figure will grow and ultimately be passed on to the taxpayer," Johnston said.
Iron ore, gold and other commodities contributed a large amount to state and federal revenue, but following the collapse of metal prices in 2013 the government moved to invest cash buffers.
As a result, the Mining Rehabilitation Fund (MRF) was launched. The Fund was designed to secure the rehabilitation obligations of tenement holders by requiring them to pay an annual levy into the Fund. These payments are then used for future rehabilitation of abandoned mine sites and other land affected by a tenement holder’s mining operations.
But following an increase in mining closures and suspensions, which has been calculated as around 10 percent of the entire state’s mines, concerns have been raised that money previously outlined for mine rehabilitation has been refunded to the minders – and it’s the tax payers who could be left to pay for it.
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Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.