The “smoking gun” of detailed mine closure cost over-run – a review using case studies of the real costs associated with the demolition and removal of infrastructure in mine closure

Authors: Fletcher, D; Hutton, A; Dick, C Download Paper

DOI https://doi.org/10.36487/ACG_rep/1152_77_Fletcher

Cite As:
Fletcher, D, Hutton, A & Dick, C 2011, 'The “smoking gun” of detailed mine closure cost over-run – a review using case studies of the real costs associated with the demolition and removal of infrastructure in mine closure', in AB Fourie, M Tibbett & A Beersing (eds), Mine Closure 2011: Proceedings of the Sixth International Conference on Mine Closure, Australian Centre for Geomechanics, Perth, pp. 97-106, https://doi.org/10.36487/ACG_rep/1152_77_Fletcher



Abstract:
Mine and facility closure planning is a dynamic and rapidly evolving landscape. In this landscape, mining companies and industry consultants are generally good at estimating the associated earthworks and rehabilitation costs because it is core business. Through our extensive work in mine closure we have found that the safe and cost effective demolition of mining related infrastructure is often grossly under estimated; or it is simply assumed that the returns on scrap steel and sale of re-usable plant will cover the related costs. With fluctuating steel prices and no guaranteed buyer for the assets, the estimated monetary return is often unreliable, and in many cases unrealistic. On this basis this logic is fundamentally flawed, and we have found that on most occasions this has meant that closure costs estimates fall well short of what the actual costs are to close the mine. GSS Environmental and Liberty Industrial have worked on over 60 mine closure projects in Australia and overseas of varying scales and across a range of commodity types. An evaluation of these projects has shown that costs associated with the safe demolition and removal of a mining related infrastructure is in the order of 20–30% of the total cost at closure. We believe it is one of the top three risk areas associated with mine closure planning and cost estimation, alongside bulk earthworks, and the capping of tailings and waste rock storage facilities. Our paper uses examples from recent projects to demonstrate all aspects outlined above. We have also endeavoured to address the following key points related to the demolition and removal of mining related infrastructure: If companies fail to plan appropriately, complicating factors such as contamination, hazardous materials, mobilisation/de-mobilisation, geographical location, decommissioning standards, site constraints and weather can add considerable costs to the project and result in variations for the demolition contractor. Closure planning often assumes infrastructure that is no longer required can be utilised by a third party and/or the new land holder. We intend to show that unless adequate consultation and planning is undertaken, this is not beneficial to the mining company, the environment, or the local community.

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