Minnesota Financial Assurance Requirements for Non-ferrous Mining
Protecting State taxpayers with bankruptcy proof financial assurance
The State already requires mining companies to have bankruptcy proof financial assurance in place to cover all possible environmental clean-up cost before issuing a permit.
The State already requires detailed review of all the costs of potential environmental exposure annually, and adjusts the financial requirements of the company accordingly.
The State already has the authority to deny or revoke a permit if a company does not comply
Financial Assurance - Related to Permit to Mine
MS93.43 Commissioner shall require a bond or other security. Commissioner shall review annually.
Rules Chapter 6132
Current rules were put in place in the early 90's after many years of study and with input from all groups, including environmental groups.
Purpose
To assure a source of funds if permittee fails to perform
All reclamation activity including closure and post closure maintenance if needed
Any corrective action, if required, for non-compliance
Required Components
Contingency Reclamation Plan
- Plan to reclaim if operator ceases in first year
- Based on 3rd party costs
- Based on current dollar value
- No salvage value includes
- Updated annually bases on size of project each year (becomes the plan to close and financially assure the site at any point in time)
Funding Sources
- A variety of sources, as deemed appropriate by the State.
State has the authority to approve the BEST source of funds
- Must be bankruptcy proof
- Must be continuously in place
What is Reclaimed
- Open Pits
- Tailing Basins
- Waste rock and surface material stockpiles
- Buildings and Equipment
- Revegetation of disturbed ground
- Wetlands by restoration, reclamation, or replacement
- Buildings and infrastructure no longer needed for any other use
Period of Time Covered
Long enough to cover time until:
- All reclamation activities completed
- Conditions necessitating post closure no longer exist
- Corrective actions (if any) have been completed
Adequacy Determination of Financial Assurance
- Assurance that the amount is sufficient to cover all reclamation costs (including closure, post-closure maintenance, and any ordered corrective action)
- Assurance that funds are available and made payable to State when needed
- That the assurance is valid, binding, and enforceable under law
- Assurance that funds are free from impact by bankruptcy
Management of Financial Assurance
- Permittee must annually estimate cost necessary to conduct contingency reclamation and corrective action plans
- Commissioner may hire third-party with financial assurance expertise
- Cost of expert paid by company
Permittee Released
Only when:
- All corrective activities are complete
- Conditions necessitating post closure maintenance no longer exist
- Corrective action (if any) have been completed
Permit to Mine Application
- Once it is deemed complete notice published in EQB
- Details of financial assurance are part of permit to mine application
- Permittee required to publish a notice once a week for 4 weeks after State notice
- Public has opportunity to review and comment for 30 days after last publication date
Standards to be Met
All features to be stable and shaped appropriately
Vegetation
90% ground cover after 3 growing seasons
Vegetation shall be similar to referenced site w/in 10 years
Timelines exist for when phases must be complete
Mine shall be closed and reclaimed to prevent adverse impacts to natural resources (determined by state and fed standards many under MPCA
)
Failure to Comply
- State has the authority to deny, suspend, revoke, or modify a permit
- State may also assess civil penalties
MPCA Role in Financial Assurance
- MPCA works with the DNR in determining amount of financial assurance and appropriate financial assurance mechanism
- MPCA has removal and remedial action authority