Australia: A tailored solution to financial assurance and mine rehabilitation - all stakeholders to (be)spoken for

Last Updated: 15 May 2017
Article by Kathryn Pacey and Jake Williams

The consultation paper proposes that FA obligations will be determined according to the estimated rehabilitation cost and risk profile of the authority holder.

The Queensland Government's reform of the State's current financial assurance and rehabilitation framework for resource activities has been introduced with the release of two discussion papers as part of the Financial Assurance Framework Package.

A new framework ahead

The release of discussion papers for the proposed Financial Assurance Framework Reform Package on 4 May 2016 follows the review undertaken in November 2016 into Queensland's existing financial assurance (FA) framework for resource activities.

Prepared by the Queensland Treasury Corporation (QTC), the QTC Report expressed concerns with Queensland's "one size fits all" FA framework and the impacts it has for the Government, the resources industry, taxpayers and most significantly, the environment.

The QTC Report sets out a number of recommendations, including the introduction of a proposed "tailored solution" for calculation and lodgement of FA. The "tailored solution", which has been approved in principle by the State Government, determines FA liability according to an operator's estimated rehabilitation outlays and risk profile.

In response to the QTC Report recommendations, the Queensland Government released two consultation papers as part of the Reform series on 4 May 2017:

With submissions closing on 15 June 2017, it is important that all stakeholders consider the impacts and effects of the proposed new framework.

The tailored solution - a new FA framework

The "Financial Assurance Framework Reform" discussion paper sets out the proposed reforms to implement the "tailored solution".

The consultation paper proposes that FA obligations will be determined according to the estimated rehabilitation cost and risk profile of the authority holder.

Under the new framework, four financial assurance arrangement categories have been established:

These arrangements are fluid, as are the resource "entity" categorisations. In the event that financial liability changes, the financial assurance arrangements may also change with them.

The calculation of rehabilitation liability will likely be by way of the revised Government-commissioned financial assurance calculator, with industry calculators to no longer be available.

The "tailored solution" establishes an alternative approach for Plans of Operations, where it will be submitted for a maximum period to be determined, with additional information able to be added when required. This differs from the current approach, which requires submission for no more than five years.

There are a number of other relevant reforms being considered, including:

  • a review of the existing approval process for the sale of resource assets for share sales, including whether there is adequate provision for rehabilitation;
  • improved data analysis, information systems and governance framework for better management of FA between different government departments, but also between the Government and resource companies; and
  • residual risk policy to minimise the future rehabilitation or residual risks for the Queensland Government (and taxpayers).

These reforms are expected to be implemented in 2018, with additional consultation papers to follow.

Improving mine rehabilitation

The second discussion paper that has been released is the "Better Mine Rehabilitation for Queensland" which proposes a new policy for mining rehabilitation (which is the key component of the Integrated Mined Land Management framework).

The policy introduces the following delivery elements for the policy:

  • life-of-mine plans for site-specific mines;
  • strict requirements for regular monitoring, assessment and reporting;
  • enforceable requirements for progressive rehabilitation;
  • completion and sign-off requirements;
  • performance based incentives; and
  • good quality data for policy and regulatory implementation.

While the discussion paper focuses on site-specific mines, it will be extended in the future to petroleum activities and resource activities with an Environmental Authority issued by a standard application process.

Relevant reforms include the introduction of:

  • life-of-mine plans (LOM Plan) for all site-specific mines (new and existing). The objective is to align with other Australian jurisdictions and ensure ongoing accountability and rehabilitation effectiveness. For new projects, the LOM Plan would be required through the environmental authority application. For existing projects, implementation will follow one year after commencement for high risk existing mines, and two years for all remaining mines.
  • regular monitoring, assessment and reporting against rehabilitation objectives in accordance with the LOM Plan to ensure the progressive rehabilitation performance of the site is appropriate;
  • enforceable requirements for progressive rehabilitation in accordance with the LOM Plan and ensuring strict compliance;
  • setting clear completion and sign-off requirements using standard guidelines that provide criteria for measuring and assessing rehabilitation outcomes; and
  • performance based incentives through a wide range of measures.

What next?

Written submissions for each of the consultation reports can be made up until 5:00pm on Thursday 15 June 2017.

With the finalisation of the FA framework expected to be in place by mid-2018, a package of further discussion papers is proposed to be release for consultation over throughout 2017:

  • Mid to late 2017:
    • Expanded range of surety providers - discussion paper release;
  • Late 2017:
    • Expansion of the Abandoned Mines Land Program - discussion paper release; and
    • Improved management of sites in care and maintenance - discussion paper release.

We will continue to track the progress of these reforms.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions