Pierce, GL & Wen, ME 2006, 'Planning for In-Perpetuity Mine Closure Costs', in AB Fourie & M Tibbett (eds), Proceedings of the First International Seminar on Mine Closure
, Australian Centre for Geomechanics, Perth, pp. 487-492, https://doi.org/10.36487/ACG_repo/605_40
The Island Copper Mine was closed in December 1995. Reclamation of the site began in 1996 based on a
closure plan approved by regulatory agencies. In 1994, when the Island Copper closure plan was submitted
to government for approval the estimated closure costs were C$15 million, for environmental mitigation and
monitoring with other money set aside for severance packages and decommissioning. The monitoring was
planned for 10 years, with the latter five years at a significantly reduced level of effort. The company view
at the time was that after five to ten years, the water quality at the site would meet regulatory standards and
allow the company to return the land to the government. This did not happen. To date well in excess of this
provision has been spent with additional expenditures planned to deal with the in-perpetuity obligation.
After about five years, post-closure monitoring regulators requested the company to undertake studies to
improve the understanding of the closed site. The company responded by undertaking comprehensive studies
of the site, of which a main focus was on the pit lake semi-passive treatment system. This type of treatment
was at the time untested in the world and Island Copper was the first site to treat its acid mine drainage by
fertilizing and using a pit lake as a treatment system. The studies lead to improvement in the underlying
science behind this unique treatment system, and ultimately lead to improvements to the system and to an
updated closure plan. This reads like we only did it because we were pressured into doing something. I’m
not sure if that’s true, but it does sound harsh. Hence my suggestion above so long as it doesn’t then become
The closure plan was assessed for post-closure residual risks, which are those risks that remain after closure
and reclamation activities have been executed. For each risk, the timing and probability of the risk
eventuating were evaluated. The consequence of each risk, should it eventuate, was considered and the
associated activities and costs were estimated.
It became apparent through this closure planning process that that the care and maintenance, monitoring and
management of the site would be required in-perpetuity because of the risks associated with the evolving
nature of the mine drainage and the long-term requirement to treat this drainage. A discounted cash flow
model captured the estimated costs for closure, with any cashflows after 50 years assumed to be incurred in-
perpetuity. This in-perpetuity cost estimate is fully risked and can help estimate long-term liability at the
site. For companies with a number of closed mines, this risk can be further managed through a portfolio
Poling, G.A. (1998) Island Copper Reclamation. Mining Environmental Management. November.
Government of Canada (1991) The State of Canada’s Environment. Environment Canada. ISBN 0-660-14237-6.
Robertson, A.M. and Shaw, S.G. (1999) The Concept of Custodial Transfer of Mined Land. In Proceedings of Mine,
Water and Environment, Seville Spain, September 13-17, Vol. 1, pp. 765-771.
Planning for In-Perpetuity Mine Closure Costs G.L. Pierce, M.E. Wen
492 Mine Closure 2006, Perth, Australia