Waiting for the grey rhino to charge: closure liability and cognitive dissonance

Authors: Ferguson, K; Matthews, J; Harmening, S; Ofsoske, C Download Paper Open access courtesy of:

DOI https://doi.org/10.36487/ACG_repo/2615_34

Cite As:
Ferguson, K, Matthews, J, Harmening, S & Ofsoske, C 2026, 'Waiting for the grey rhino to charge: closure liability and cognitive dissonance', in AB Fourie, G Boggs, J Heyes & M Tibbett (eds), Mine Closure 2026: Proceedings of the 19th International Conference on Mine Closure, Australian Centre for Geomechanics, Perth, pp. 1-9, https://doi.org/10.36487/ACG_repo/2615_34



Abstract:
Effective and realistic understanding of closure liabilities that exist and will be incurred, inclusive of risk and uncertainty, is crucial for informed decision-making and the efficient closure of mining operations. Accurate financial planning allows legal, environmental and social responsibilities to be met while also safeguarding the financial stability of the mining company. There is a history of closure liabilities increasing significantly towards the end of operational life, creating ‘surprises’ for boards, investors and regulators. Have these increases occurred often enough for the industry to consider material closure liability increases at the end of operational life a ‘grey rhino event’, given the repeatability of this ‘surprise’, regardless of commodity, geography or size of company? Grey rhino events, a term introduced by policy analyst Michele Wucker, represent a highly probable, high impact yet neglected threat. Grey rhino events are not random surprises; rather, they occur after a series of warnings and visible evidence. The risk is evident and the event foreseeable. These closure liability increases occur for a multitude of reasons, some understandable and valid, some that could be perceived as indefensible. One of these reasons may be the psychological phenomenon of cognitive dissonance and related biases, which cause us to see the rhino charging but find excuses or reasons to not believe it or not act. Cognitive dissonance occurs when there is a conflict between beliefs and actions. Could cognitive dissonance result in irrational decision-making and chronic underestimation of closure liability and hence, potentially, reduced focus and effort provided to integrated closure across the life of a mine? This paper aims to collate insights into how mining companies can recognise and potentially mitigate cognitive dissonance, thereby improving understanding of the realistic closure liability and perhaps avoiding the charge of the grey rhino. There are numerous reasons for increases in closure liability. Dunow & Kalisch (2022) identify the following as the primary reasons for poor closure liability estimation from their experience:

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