A hole in the earth, a hole in your pocket

The Warkworth mine in the Hunter Vally in NSW.
April 7, 2017

If we apply for a loan, we are subject to financial interrogation and if it looks like we will not be able to repay it the lender will not take the risk. It is reasonable to assume the same strict conditions apply when mining companies wish to buy or lease our land.

If they cannot afford to obey the mine rehabilitation conditions the government sets, it should not take the risk and allow the mine to operate. Yet with very few mines being rehabilitated and an environmental debt reaching billions of dollars, it is becoming apparent that we are just giving land away to be destroyed, and then footing the bill for its rehabilitiation.

Up to 53% of Australia is covered by mining or exploration licences. To convert an exploration license into a mining license it must meet Major Project approval conditions. Typically these include terms that say they must ensure the protection of the community, protect indigenous artefacts and culturally significant sites, rehabilitate any damaged land, protect endangered species, create environmental havens and regularly report on those processes for monitoring.

However, it has become clear that mining companies are not holding up their end of the bargain. Instead of rehabilitating mine sites, mining companies have found loop-holes to avoid the true cost of rehabilitation.

One strategy is to sell the mine to junior companies before formal closure, when the eventual rehabilitation cost would be known. This strategy was employed by Rio Tinto when it sold the Blair Athol mine for $1 to a junior mining company. The sale coincided with experts estimating the cost of rehabilitation would reach hundreds of millions of dollars. As a former owner, Rio Tinto only had to pay $80 million.

Another strategy is for mining companies to place the mine in a state of “care and maintenance”, a corporate trick that leaves a mine in limbo, as the cost of rehabilitation is not due until the mine formally closes.

Examples litter the countryside. The NSW government ignored the advice of experts at the Department of Planning, which said Whitehaven Coal should rehabilitate its final void to avoid the movement of heavy metals and acid soils. Instead, the public will be left with permanently scarred, toxic land, while Whitehaven Coal executives laugh all the way to the bank. With the land too toxic to farm and clean water sources drained or poisoned, the government will have no choice but to rehabilitate the mine area using tax-payers' money.

Mining companies are not just costing us endangered ecosystems, they are also ruining the lives of farmers and locals. There are many stories of people’s livelihoods being threatened or destroyed. One example is the farmers from Maules Creek, who are losing their livelihoods due to Whitehaven Coal’s mismanagement of rehabilitation, which allows uncontrolled animal populations to escape the mine site and destroy crops.

The land that mining is destroying is the land that supplies the food and water we need to survive. History has shown that this is not a temporary loss. When a company fails to rehabilitate a mining site, it is poisoning our access to land, food and water for generations to come.

When governments approve mines, a bond is secured to cover the cost of rehabilitation. But this bond often amounts to a fraction of the actual cost of returning the land to its pre-mine state.

A surprisingly common example is Anglo American’s Callide mine security bond of $114 million, about 20 cents for every tonne of coal sold. This was 10 times less than independent estimates for rehabilitation of $2 for every tonne of coal. The government will be forced to pay millions to make up the difference.

Even if we can turn a blind eye to the 50,000 abandoned mines littering our country, soon we will not be able to ignore the impact of the expansion of active mines on the economy. Thanks to unethical and greedy behaviour from the mining companies, Australia now finds itself on the brink of an ecological financial crisis.

The Queensland Auditor-General’s 2014 investigation into these practices resulted in a damning report. If we want continuing access to clean water and to grow our own food, Queensland’s rehabilitation debt of $3.2 billion will have to be paid by future generations of Queenslanders. Unsurprisingly, the NSW Auditor General is now pursuing a similar investigation.

Rather than just wait for an ecological financial crisis, we must urge governments to give out smarter environmental loans. If we must mine our land, we have to hold mining companies accountable. By requiring bonds that reflect the true cost of rehabilitation, we can take a single, simple step toward protecting the land.

[Paris Ericksen is currently working with the Leard Forest Research Node and Wando Conservation who are bringing people of all backgrounds up to the Leard Forest for citizen science projects.]

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