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CHAPTER 16.7

Closure PlanningEvelyn L. Jessup Bingham

INTRODUCTIONIn recent years the minerals industry has recognized the impor-tance of sustainable, integrated closure planning. Because of the finite nature of ore bodies, all mine and related facilities will eventually close, and the reputation of the industry is very much dependent on the legacy it leaves. Whether a facility has 10, 20, or 50 years of operational life remaining, integrating closure planning into the mining and metal processing business can result in value for both the company and the wider community.

Activities associated with mineral resource development have a significant impact on the social and environmental aspects of a site. Any site disturbance, even in the early stages of a project, creates a legal and financial closure obligation for the mining company. Communities, governments, and lending institutions are more and more aware of the benefit of good closure planning and demand it as part of the permitting pro-cess for new or expanded operations.

Closure of an asset, be it a mine or mineral processing facility, is generally not straightforward and requires deal-ing with the uncertainty of future conditions and events concerning commodity prices, stakeholder demands, regula-tory requirements, environmental conditions, and ore grade. Ideally, closure is carefully planned and occurs with the exhaustion of the mineral resource, but it is not uncommon for closure announcements to come suddenly with the fall of commodity prices or some other unplanned event. Risk-based closure planning is inclusive of such uncertainty.

Closure of an asset is a process that works toward an end point that can be referred to as completion. Planning for a successful closure is a complex, multi-disciplinary task that is essential to minimizing long-term risk for the mining com-pany, the environment, and affected stakeholders.

CHAPTER ORGANIZATION AND APPLICABILITYThis chapter is intended to provide basic practical guidance on closure planning. The information presented should be con-sidered just a first glimpse of the wide-ranging discipline of closure planning.

In recent years a number of comprehensive and spe-cialty documents have been created by governments, industry

associations, and nongovernmental organizations (NGOs) on the subject of asset closure planning and financial assurance, such as those available through the International Council on Mining and Metals at www.icmm.com.

The core information provided in this chapter includes a number of practical tables and lists of information that have been found to be useful for closure planning practitioners who are creating or reviewing best-practice integrated closure plans.

After a brief overview of closure planning issues and a description of what integrated closure planning means, a set of principles for creating a framework for closure planning is presented. Following this, the steps involved in closure planning are outlined, and detailed components of an effec-tive closure plan are described according to the closure plan-ning steps. Also presented are a number of common risks to be considered in closure planning. Lists of this type are often useful in preparing for closure risk assessment workshops with a multi-disciplinary team to assist in the completeness of the review. Finally, a checklist is offered, showing how the detail and contents of a closure plan can change through the life cycle of a mineral resource development project.

The chapter content is applicable to a wide range of facil-ities and activities including mines, processing facilities, and greenfields and brownfields projects. The concepts and tools are appropriate for creating a closure plan for the first time or reviewing an existing closure plan.

COMPLETING THE ASSET LIFE CYCLE—CLOSURE PLAN OBJECTIVESA successfully completed closure process is one in which the land affected by the asset has been rehabilitated to a sustain-able condition. Ideally, in this completed state, the mining lease ownership has been relinquished by the mining com-pany to another land user with minimized continued liability. This sustainable completed state can only be achieved through careful and informed planning over the long term. Closure planning is the responsibility of the mining company, but it cannot be done in a vacuum. Mining companies must involve governments, the communities of which they are part, and

Evelyn L. Jessup Bingham, Group Manager, Closure & Waste, BHP Billiton, Melbourne, Victoria, Australia

1754 SME Mining Engineering Handbook

other stakeholders in closure planning to achieve a successful closure outcome.

Increasingly, financial institutions lending capital to min-eral resource development projects set a high standard for asset closure planning as they seek to maximize value from the project and minimize risk. These institutions have learned hard lessons from the past where poor operational closure practices have resulted in ongoing legacies of water pollution, safety and health hazards, and the resulting public outrage and continuing liabilities. Many countries have specific regula-tions concerning closure planning and completion. Currently, however, there is no overarching world governance body cov-ering mine and mineral processing facility closure, and there are still areas in the world where closure regulation is minimal or nonexistent.

External mining stakeholders such as local communities, conservation groups, and biodiversity advocates are becoming more and more sophisticated about the outcomes of good and bad closure planning practices. Given the opportunity, exter-nal stakeholders can become partners in closure planning, ulti-mately to the benefit of all.

Good closure planning toward the outcome of sustainable mine completion requires communication and engagement with stakeholders to develop agreed-on closure plan objec-tives, which should include the following:

• Comply with regulatory requirements or industry-leading practice where local regulatory requirements are insuf-ficient to manage risk.

• Protect public health, safety, and welfare over the long term.

• Maximize environmental sustainability.• Mitigate socioeconomic impacts during and after closure.• Provide a reasonable basis for estimating and managing

closure costs.• Minimize costs for the mining company, the government,

and the public.• Achieve sustainable land-use conditions as agreed with

stakeholders.• Enhance the reputation of the mining company as a

responsible corporate citizen, and ensure that shareholder value is preserved.

Timing and how these objectives are achieved through the life of the asset life cycle is very site specific. Certain types of mines (such as porphyry copper deposits and other hard-rock mines) and mineral processing centers may not allow for any concurrent or progressive rehabilitation or reclamation (for the purposes of this chapter, reclamation and rehabilitation are used interchangeably) during the operating phase because the disturbed areas (such as the open pit, tailings impound-ment, waste dumps, and concentrator buildings) are in con-stant use during the operations. Assets of this type may spend many decades planning for closure activities that will occur at the end of the asset life.

Coal mines, on the other hand, generally have the oppor-tunity to execute and obtain sign-off on rehabilitation through the life of the asset. However, even projects conducive to pro-gressive closure will face challenges associated with life-of-asset (LOA) plans changing as commodity prices go up and down. It is not unheard of for coal mines to have to dig up or cover over well-established rehabilitation because coal seams once thought uneconomic are now scheduled to be mined.

Economic conditions going in the other direction more commonly present a serious obstacle to sustainable closure planning and ultimate completion of the closure process. A downturn in commodity prices usually results in a lack of resources for progressive rehabilitation (if the mine continues to operate) and for closure execution if sudden closure of the asset is announced.

To minimize the ups and downs of economic cycles and resource availability, effort on the part of the mining company must be made to understand and forecast changing conditions that might affect closure planning and execution as well as possible changes in stakeholder needs. Closure plans must be adjusted through time and adequate resources allocated for difficult economic conditions. Postmining land use and other objectives may need to change according to changes in the LOA plan and external factors.

INTEGRATING CLOSURE PLANNING FOR EFFECTIVENESSA mining company’s commitment to good closure planning practices will pay off in reduction of liabilities for the com-pany and improved reputation with stakeholders. In the past, closure planning has often been a stand-alone activity in the business, usually done as a one-time effort to meet a regula-tory obligation.

It is not uncommon for the asset closure plan to be the responsibility of the environmental function at a site while the LOA plan is the responsibility of the mine planners and the updates to the closure financial provision are handled by the accounting department, whose focus is on meeting accounting guidelines. A lack of communication between these various departments can cause the closure plan scope and details to fall well behind the inevitable updates to the LOA plan and the closure provision carried on the books to be out of date with both.

To address closure planning issues and meet business objectives to manage risk, it is necessary to ensure that clo-sure planning is fully integrated in the core business of the asset. As business conditions change, LOA plans change, and so must the closure plan change. Additionally, the detail and accuracy of closure plans must change through the life cycle of the asset—starting out as conceptual and progressively becoming more detailed over time. Finally, as regulations and stakeholder expectations change, the closure plan needs to change. Effective closure plans must be integrated in a num-ber of levels including the following:

• Integration with the LOA and long-term business plan. The closure plan necessarily links past disturbance, cur-rent operations, progressive rehabilitation, and future dis-turbance planned until the end of asset life.

• Integration with external stakeholder affairs. A focus of closure planning should be engagement with the external stakeholders affected by closure. This will include work-ing with the government, local community, and NGOs to understand their needs and concerns. Interaction with external stakeholders during closure planning not only results in compliance with regulations but also affords the development of robust closure criteria to support an acceptable end land-use and communities that are better prepared to support the company when it comes time for completion and lease relinquishment.

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• Integration with all the relevant functional disciplines on-site. Closure planning and ultimately the execution of the closure project toward completion will involve senior management, human resources, project engineering, busi-ness improvement specialists, environmental managers, operations, planning engineers, community and external affairs, legal advisors, risk management, and finance; all are necessary for effectiveness. Commonly, the follow-ing key roles and responsibilities will be essential to the multidisciplinary team:

– Technical services provide the engineering design, LOA plan, and rehabilitation plan.

– Project engineers and cost specialists are responsible for cost estimates, design of necessary pilot tests, and execution by project management.

– Environmental specialists are responsible for devel-oping closure criteria and performance requirements working with government representatives to meet regulations.

– Community specialists are responsible for stakeholder engagement and closure scenario building.

– Finance and accounting personnel are responsible for provisioning and maintaining closure risk registers.

– Management is responsible for setting key perfor-mance indicators and milestones for closure.

Integrated closure plans are developed, reviewed, and updated starting in the LOA concept phase and moving through prefeasibility, feasibility, execution, operation, and closure phases of a mineral development project. Throughout this lengthy period, integration in the key areas will increase the probability of a closure plan meeting the business objec-tives upon execution.

CREATING A MANAGEMENT FRAMEWORK FOR INTEGRATED CLOSURE PLANNINGIn order to fully integrate closure planning in the business, a long-term commitment to a set of basic principles is necessary from senior management. Closure planning is not a one-time endeavor but one that takes place over many years or decades. The people involved in closure planning will come and go; however, if the company has adopted a framework of prin-ciples, closure planning can proceed and improve through the life cycle of the mineral development project.

The following basic list of principles should be consid-ered and adjusted as required for adoption as a company “clo-sure policy” to form a solid framework from which the closure planning team can work over time.

• Framework Principle 1: Regular Review and Updates – Closure plans shall be maintained throughout the life cycle of all mineral development assets.

– Closure plans shall be reviewed annually in con-junction with the LOA planning process. Closure plans and associated cost estimates shall be revised when there is a significant change to the LOA plan, and when there are regulations or factors signifi-cantly affecting the closure plan and associated cost estimates.

– Closure planning processes and closure plans and cost estimates shall be subject to reporting, audit, and gov-ernance procedures, particularly where there is a risk of material misstatement on financial reports or a sig-nificant effect on business decisions.

• Framework Principle 2: Management of Business Risk – Closure planning shall include an assessment of all risks associated with closure including, but not limited to, risks associated with

- Postclosure liabilities; - External stakeholder needs, aspirations, concerns; - Deferral or delay in progressive rehabilitation dur-

ing operations; - Uncertainty in environmental, regulatory, or com-

munity aspects; - Uncertainty in cost estimations; - Uncertainty in technical aspects of closure; and - Delay in closure execution.

– The management of closure risk shall be developed in accordance with formal risk management standards and associated guidance approved by company management.

• Framework Principle 3: Accurate Estimates of Cost – Closure plans shall be prepared in accordance with project management principles and contain sufficient detail to determine the cost of closure to the extent necessary to manage closure risk.

– Closure plans will be progressively upgraded accord-ing to the life-cycle stage of the mineral development project as shown in Table 16.7-1.

– Environmental and engineering studies will be per-formed to increase the certainty of closure cost esti-mates as an investment comes closer to the need to execute the required closure activity.

– All closure plans shall include an estimate of the pro-vision for closure, in accordance with international accounting guidelines.

THE CLOSURE PLANNING PROCESSWhether creating a closure plan from scratch for a greenfield project, exploration project, or simply reviewing an existing closure plan for a large, mature mining property, the steps in the closure planning process are essentially the same. The level of detail and effort required to develop the closure plan through this process will vary as a function of site-specific issues and the life-cycle phase of the project.

Sudden or unplanned closure due to a downturn in com-modity price or other adverse business decision may call for an acceleration of this process and require such things as interim care and maintenance plans to be implemented while the closure execution plan is being finalized.

Table 16.7-1 Closure plan upgrades across life-cycle phases

Life-Cycle Phase Closure Plan Class

Projects in study phase Conceptual-level closure plan and cost estimate ±50% to 30%

Assets with >10 years life remaining Conceptual-level closure plan and cost estimates, e.g., ±30%. Expectation of progressive improvement in uncertainty and cost estimates annual review.

Assets 10–3 years life remaining Prefeasibility-level closure plan and cost estimates, e.g., ±20%. Expectation of progressive improvement in uncertainty and cost estimates annual review.

Assets with 3–1 years life remaining Feasibility-level closure plan and cost estimates, e.g., ±15%.

Assets in closure execution or postclosure

Execution-level closure plan and cost estimate, e.g., ±10%


Workshop ApproachThe process of developing and updating an integrated closure plan should take as much thought and effort as that dedicated to design and development of any significant project. The result of the closure planning, even in the early phases, has the potential to significantly affect the business and stakeholders. Closure planning sets the course for years of activities, and it involves the expenditure of material funds for studies and, ultimately, closure execution.

Because of the multi-disciplinary nature of closure plan-ning, facilitated workshop sessions are useful at intervals in the closure planning process. An internal closure risk assess-ment workshop is useful in the beginning to set the context, agree on strategy, and explore risks.

Workshop sessions with external stakeholders can be effective in building relationships and obtaining input about expectations. If available, an expert in workshop facilitation can add significant value, keeping the participants on point, while enabling constructive brainstorming, debate, discus-sion, and challenge.

A single point of accountability, a team organizational chart, and a work breakdown structure and schedule should be developed for the closure planning team to refer to. This should be updated annually during the regular closure plan review.

Basic Steps in Closure PlanningRecommended steps for closure planning are as follows:

1. Set the context by reviewing background data regula-tions, LOA plans, environmental baselines, and previous closure plans. Review stakeholders and engage as needed to understand their issues. Review the current status of the progressive rehabilitation plan and implementation schedule to determine whether the LOA plan, progressive rehabilitation plan, and closure plan align.

2. Establish closure plan strategy and criteria includ-ing scope, objectives, assumptions, design criteria, and completion criteria. This sets the basis for all subsequent steps. It is essential that the closure team reaches agree-ment on the standards and strategy to efficiently complete the planning.

3. Assess risks and evaluate closure options. The closure risk assessment process forms the backbone of inte-grated closure planning, and therefore a standardized risk assessment process, such as that developed by Australia and New Zealand (AS.NZS 4360:2004), should be used. Involving the proper set of people with the detailed knowledge of the site is essential to identifying all the risk issues. Standard options analysis techniques that would be used on any large project involving significant costs should be applied to ensure sufficient rigor in pro-viding the basis of the preferred closure plan.

4. Select a preferred closure plan from the option analy-ses to control closure risks at an acceptable level. This step is usually an iterative process with Steps 3 and 5, as cost estimate and the risk profile necessarily enter into the decision-making process. The preferred closure plan will be adjusted with changes to the LOA plan and other changes to the context and risk profile of the site as the annual reviews proceed over time.

5. Generate robust cost estimates for the preferred clo-sure plan in accordance with sound engineering and

project management principles. The engineering cost estimate serves as the basis for a number of subset esti-mates, including internal business investment valuation, accounting provision for financial statements and govern-ment financial assurance or bonding. Both deterministic and probabilistic estimates may be generated depend-ing on the level of uncertainty. Probabilistic techniques such as Monte Carlo simulations may require specialist effort but can very effectively incorporate the uncertainty of such items as undefined contamination and cost fluc-tuation. As the site nears closure, specialist demolition, salvage value, and remedial experts will be required to establish the cost of an executable closure plan.

6. Establish an action plan for improvement. Effective integrated closure planning requires improvement in the knowledge base in preparation for the next review cycle and beyond. This will include further stakeholder consul-tation, engineering and environmental studies, site char-acterization studies, definition of existing contamination, and rehabilitation pilot testing. These actions may require allocation of significant resources, and therefore a formal action plan for improvement establishing schedule and budget is necessary.

7. Update the closure document and record management system. The closure plan process represents a significant investment in human and financial resources over many years. A readily retrievable archive of the process, the information used, and the decisions made is essential for annual reviews and audits.

COMPONENTS OF THE INTEGRATED CLOSURE PLANTable 16.7-2 provides a guide to the components of a typical closure plan organized by the high-level steps taken by the closure planning team. Because of the site-specific nature of closure planning, components will vary according to many fac-tors. The list in Table 16.7-2 can be used in a number of ways: as a closure planning checklist, a table of contents for a closure plan, an update list during the annual closure plan review, or a closure plan audit checklist.

CLOSURE RISKAssessing closure risk requires a systematic, structured evalu-ation. As mentioned, the risk assessment forms the basis of the closure plan and cost estimates. The focus of the closure risk assessment will be to establish an acceptable risk profile for the company and all other stakeholders upon completion of the closure project.

Materiality of risks will be an important consideration for the closure team to prevent the closure planning process from becoming bogged down in unnecessary detail. It is useful for the team to establish a materiality threshold at the beginning of the closure planning process as an assumption. This will depend a great deal on where the asset is in the life cycle, the class of closure plan (concept, prefeasibility, feasibility, etc.), and the overall magnitude of the closure plan.

For example, a closure team may decide that risk issues identified which have a worst-case cost of addressing less than $200,000 are not material to the process of updating a con-cept-level closure plan that will total more than $100,000,000. The closure planning team may record these lesser risks or review them in subsequent updates but not spend valuable time putting them through the full risk assessment and option evaluation process.


Table 16.7-2 Key components of an integrated closure plan

Plan Component Description and Comment

Closure Planning Step 1 Set the context.

1a. Life-of-asset (LOA) plan summary and map

The LOA plan is the basis of the closure plan. Additionally, the closure plan can affect the LOA plan when the cost and risk profile of the closure plan is considered. The LOA plan establishes the impacted area and scope of works to be decommissioned, rehabilitated, closed, and released. Summaries of the final configuration of pits, dumps, and plant areas are included in the closure plan.

LOA plans necessarily change with changing economic conditions and changing technology. Closure plans should be fully integrated and updated with the LOA plan.

1b. Progressive rehabilitation plan summary and map

Plans to rehabilitate areas of disturbance back to final configuration during the operating phase (prior to closure execution) are integrated in the closure plan. Progressive rehabilitation plans are integrated with the LOA plan and closure plan, and are reviewed annually.

Expenditures for progressive rehabilitation are part of the operations budget and commonly are excluded from the closure plan and cost estimate.

A significant closure planning risk is that progressive rehabilitation during operations falls behind schedule and unexpectedly needs to be completed as part of closure execution. Similarly, sudden closure (e.g., due to commodity price downturn) can result in a breakdown in the progressive rehabilitation schedule and an underfunded closure plan.

1c. Studies register—environmental, cultural, heritage, and biodiversity conditions

A reference list of studies documenting conditions for the LOA plan footprint, pollutant management area, and regional area impacted must be established.

Baseline studies and recent reviews of conditions are important in establishing closure criteria. In particular, incorporating the ongoing results of groundwater monitoring, surface water monitoring, and vegetation studies into closure planning is critical.

Basis for remedial projects (current and forecasted) and their expected outcome should be reviewed regularly and factored into closure planning.

1d. Legal and corporate requirement register

A register of regulatory/legislative mandatory government requirements that cover the environmental, social, financial, and legal aspects of the closure plan must be kept up-to-date and reviewed annually. These requirements vary significantly from country to country and site to site, and must be well understood as they become the basis for the absolute minimum criteria for the closure plan to meet.

Site-specific permit requirements are specified. Legal commitments to joint-venture partners, financial institutions, or other entities affecting closure planning must be met.

A register of company requirements, such as internal, environmental, or community standards and industry-leading closure criteria and practices, must be kept. Distinctions must be made as to which are considered mandatory (as in the case where a constructive obligation has been created by publicly indicating a standard higher than legislative requirements) and which are discretionary.

1e. Land and property ownership register

A register summarizing the site land information impacted by the site disturbance should be created. Property boundaries, geographic information system data, lease arrangements, deeds, and related obligations must be clearly recorded and reviewed for their impact on the closure plan.

1f. Stakeholder analysis register

External and internal closure stakeholders must be identified; known stakeholders’ needs, concerns, and expectations must be assessed and considered. Requirements and community expectations in developing overall closure objectives and criteria for postclosure land use and cultural and heritage values must be evaluated.

This register is updated as closure planning proceeds through the years to reflect current demographics and changing views as the stakeholder consultation and external affairs management plan (discussed further in step 6b) is implemented.

Closure Planning Step 2 Establish closure plan strategy and criteria.

2a. Closure boundary and scope summary

This may be a simple list and diagram of the key elements of the site, established by the multifunctional closure team after review of existing information.

Establishing the boundaries of the closure plan may not be completely straightforward. The closure plan may or may not include such elements as a joint venture or contractor-run coal processing plant. A rail spur on-site may be included in the closure plan at one site, while another site’s third-party-owned railway passing through the site is not included.

Intangibles such as the human resources severance plans or a company-sponsored community support trust are to be key elements recorded and clearly included, or not included, in the closure plan to avoid confusion and errors in closure provisions as time goes on.

2b. Closure strategy, objectives, and assumption documentation

Site-specific high-level vision, strategy, and objectives, followed by a more detailed listing of supporting assumptions (e.g., target closure date, costing basis in-house or contractor), should be established. These are updated as needed during the annual review to reflect any changes in stakeholder and company requirements. The materiality of risks should be established for consideration in the risk assessment for the rest of the closure process.

2c. Closure criteria register—design criteria and performance indicators

Determining closure design criteria and performance indicators is an interactive process that takes form as the closure team proceeds through the risk assessment and closure options analysis.

Examples of specific criteria include depth of topsoil, minimum requirement for slopes to control erosion, and storm criteria for sizing water management structures.

The specifics of these items will vary depending on where in the life cycle the asset is, starting out as conceptual when closure is many years away and becoming very specific during the closure execution and postclosure monitoring phase.

The closure criteria register should provide a high-level summary of rationale and references for how the criteria were determined (e.g., reference to international engineering standards, site-specific risk control basis, local regulatory mandate).

(continues)



Closure Planning Step 3 Assess risks and evaluate closure options.

3a. Closure risk register The closure plan can effectively be thought of as a set of risk control measures. Documenting the output of the formal detailed assessment of all business, environmental, and social sustainability aspects and risks of closure is critical to the closure planning process.

It is essential that risk assessments are reviewed and updated annually or whenever there are major changes in the LOA plan or regulatory requirements. The risk register should document the full range of closure risk, risk rating, and enough background information to enable efficient review and communication for audit. The risk register also serves as the basis of the annual closure plan review. Table 16.7-3 provides a list of examples of common closure risks and the associated closure plan controls.

3b. Closure opportunities register

While risks associated with closure are usually the primary focus of the closure planning team, it is important to identify and develop any closure opportunities.

Postclosure land uses for the large expanses of land typically involved in a mining property should be explored. Industrial parks, emerging carbon sequestration techniques, alternative energy (such as solar and wind power generation stations) may present economic development opportunities. Timber, agriculture, and grazing may be appropriate.

Biodiversity preserves and wildlife conservation areas are postclosure land uses that may present long-term opportunities.The community or regional government may have an interest in using infrastructure such as roads, bridges, power plants,

and warehouses after operations have ceased. The capacity of a third party to manage these facilities needs to be carefully gauged prior to the release of the infrastructure. It is not uncommon for the mining company to find the liability coming back unexpectedly if the recipient of the infrastructure finds itself unable to bear the maintenance or operating costs.

Other common opportunities to evaluate include third-party reprocessing of low-grade ore stockpiles prior to rehabilitation, recovery of metals from postclosure water treatment, and revenue created by salvage value during demolition.

Closure opportunities assessment should be evaluated and documented in the same manner as downside risk.

3c. Closure option analysis summary

As the closure team works through the evaluation of risks and opportunities, various closure plan options will be generated. Formal and informal options analysis will be required to choose the preferred set of activities that become the updated closure plan. As options are considered, objectives and criteria may need to be adjusted, data gaps may be identified, and the interactive nature of closure planning becomes apparent. Concisely documenting options considered will make subsequent reviews and updates more efficient.

Closure Planning Step 4 Select preferred closure plan.

4a. Postclosure land use and final landform plan

Postclosure land use will be developed and agreed upon with relevant stakeholders (both internal and external) and as the result of risk assessment and options analysis.

The postclosure land use will have a significant effect on the final landform plan, and both are tied to developing an acceptable postclosure risk profile. Examples of this interaction include reducing erosion risk, where final landform slope angles are minimized; establishing self-sustaining vegetation, where landforms are designed to promote or discourage access for timber or grazing activities; or achieving flora and fauna biodiversity goals.

More than one postclosure use may be compatible at the same site, such as a solar panel installation on a rehabilitated waste dump, which may work well with managed grazing. Conversely, postclosure land uses may be at odds with each other or pose unacceptable risk, such as managed grazing vs. biodiversity uses or access to water for grazing animals vs. public safety issues.

Landform plans should reflect the postclosure public access situation. Re-contouring of land to deter public access where necessary may be possible in lieu of fencing that requires maintenance.

Public safety and long-term environmental sustainability should always be an overriding consideration and must be worked through with applicable stakeholders.

The final landform plan should include maps and other documentation that clearly show the final landforms and how they support the postclosure land use.

4b. Closure execution plan An adequate description and schedule of closure actions and activities are required. The level of detail included in the closure execution plan will depend on the class of closure plan (conceptual, feasibility, etc.), regulatory requirements, and the company’s internal project management requirements.

This plan is sometimes referred to as the annual closure plan update or preferred closure plan and commonly addresses all activities required for closure including

• Infrastructure decommissioning;• Remediation of contaminated soils;• Water remediation;• Earthmoving, topsoiling, revegetation;• Social management—community and work force (training, economic development); and• Project management and administration.

Attention to completeness is required, as this will provide the basis for the cost estimates. Supporting documentation may include organizational charts, work breakdown structures, and contingency plans.

It is not uncommon for an asset to develop and mange multiple versions of a closure execution plan that contains varying levels of detail depending on the whether the audience is community stakeholders who want a high-level summary or the engineering functions needing the detailed plan.

(continues)

Table 16.7-2 Key components of an integrated closure plan (continued)



4c. Postclosure plan It is critical that a schedule of postclosure actions and activities be developed and updated. Following the initial phases of decommissioning and rehabilitation, the postclosure period continues until the mining lease is relinquished or the company is otherwise released of liabilities.

This postclosure phase needs to be considered in the risk assessment process. Indeed, it can be a surprisingly lengthy and expensive phase, perhaps continuing into perpetuity at some older more problematic operation sites.

Postclosure activities include long-term water monitoring, data analysis, and reporting to company and government. They also include maintenance of remaining facilities, such as fences, water treatment plants, and water conveyance structures; actions required to repair erosion; and other rehabilitation repairs.

The project management and administrative activities required for the postclosure period must be included in the plan.

4d. Completion plan/mining lease relinquishment plan

In most cases, one of the prime objectives of a closure plan is to meet the performance indicators set by government and other stakeholders and to obtain formal relinquishment of the mining lease and sign off that all company obligations are complete.

Unfortunately, there are very few examples where this has been successfully accomplished. Developing a mining lease relinquishment plan in the early phases of mine life is intended to give clarity to the process and mechanisms required for completion of closure.

Ideally, the plan is developed in conjunction with the formal approval body such as the state or federal government. Attention should be given to the fact that most governments around the world (in both developed and undeveloped countries) do not have adequate procedures to sign off on the relinquishment plan or officially release the company, even when it is clearly demonstrated that the closure criteria have been met.

Closure Planning Step 5 Generate cost estimates with sound principles.

5a. Deterministic cost estimate and range analysis

Cost estimates are made for the activities that constitute the selected closure execution plan. Typically, a deterministic range analysis estimating the range of costs of each activity is captured as line items in a spreadsheet. Cost estimates should follow the standard project management and engineering estimate procedures that would be undertaken for any large-scale, multimillion-dollar projects.

It is useful to forecast expenditures for a 30-year period following the targeted closure date to see the larger, long-term picture and to ensure that all costs are captured to avoid underestimating the cost of closure.

The closure team will need to review applicable government, accounting, and corporate requirements to decide if a deterministic cost estimate is a sufficient end point or if probabilistic modeling is required.

5b. Probabilistic modeling for expected cost of closure

Probabilistic cost modeling, using various techniques including the Monte Carlo simulation method, can be very effective in managing the inherent uncertainty of closure cost estimates. Probabilities can be assigned to the cost range analysis, event risk occurrence, and timing of key aspects affecting present value calculations and the like.

The results of a probabilistic cost model for closure may satisfy a number of government, accounting, and corporate requirements to report the “expected value” of closure that demonstrates an incorporation of risk management into to the cost estimate.

The closure team will want to include the expert advice of probabilistic financial modelers as would be done for any large-project costing effort.

5c. Closure cost summary report

The results of the base cost estimate (whether deterministic or probabilistic) will be manipulated for various purposes according to specific guidelines. The three most common types of closure cost estimates required are the following:

• Business valuation. This all-inclusive cost estimate is used primarily for internal business decisions and follows company-specific investment standards. The closure valuation looks at the LOA disturbance (rather than existing disturbance), integrates progressive rehabilitation, and is usually adjusted to account for salvage value and tax benefits.

• Accounting provision. International accounting standards are very specific for determining an acceptable provision to be declared in the mining company’s financial statements. Review of current accounting standards by an accounting profes-sional is necessary to ensure compliance with corporate government requirements such as the Sarbanes–Oxley Act of 2002 in the United States. Generally, provision calculations do not include salvage value, do not allow tax benefits to be recognized, and only address current reporting year current disturbance (rather than LOA disturbance).

• Government financial assurance. Guidelines vary greatly country to country and state to state. It is critical that the closure team adequately reviews the site-specific regulatory requirements for calculating financial assurance.Progressive rehabilitation is most often treated as an operating cost and is not included in any of these closure cost

estimates. Progressive rehabilitation is budgeted and tracked as any other operational expenditure according to local accounting guidelines.

Discount rates are generally applied to all of the above cost-of-closure calculations. Assumptions made to determine present value may vary and should be carefully documented to avoid errors and confusion.

Documenting assumptions made and guidelines followed to determine the reported costs of closure is important to avoid confusion in subsequent reviews and to provide a basis for internal and external auditing.

5d. Closure plan review and audit plan

Regular, formal review of the closure plan and associated cost estimates are critical to keeping the closure plan accurate and effective for managing risk and liabilities and for making sound business decisions.

An annual review by the closure planning team, integrated with the LOA plan update, should be scheduled and results documented.

Review by an entity outside the closure team can be very helpful due to the complex nature of closure planning and the potential for errors in the risk-assessment process. This review can take many forms, including expert peer review, internal audit, audit by joint-venture partners, or consultant review.

The scope and details of the internal and external peer reviews will vary with the level of site-specific business risk and where the mining venture is in the life cycle. As the site nears closure execution, detail reviews and audit of the closure plan and cost estimates become critical to managing business risk.

(continues)





Closure Planning Step 6 Establish an action plan for improving the closure plan.

6a. Closure study plan A schedule of environmental and engineering studies and projects is required to systematically reduce the uncertainty in the closure plan. Examples include piloting wast dump covers, vegetation trials, groundwater studies, waste characterization, and community surveys.

The closure study plan should contain sufficient detail on goals and objectives to be effective. The study plan should include estimates of human and cost resources required and should identify where the resources are budgeted.

6b. Stakeholder consultation and external affairs management plan

A plan for engaging and informing stakeholders around closure issues should be prepared. Economic development for the community postclosure must take place over many years to be effective and should be explicitly addressed in the external affairs management plan.

Additionally, planning is necessary to receive sufficient input on postclosure land use and sustainable development. Frequency and range of activity will change over time depending on the life cycle of the asset. Human resources and budgets required should be identified and scheduled.

Closure Planning Step 7 Update closure document and record management system.

7a. Closure document and record retention management system

Closure planning updates will take place over many years or decades and will be subject to audit and regular review. A formal system with accountability will need to be established for the short and long term. Information gathered during the closure planning process should be documented in a manner that allows easy access and change management.

Particular attention to effective document retention is required in the postclosure period and following completion and lease relinquishment.

Table 16.7-3 Common closure planning risks

Type Closure Risk Issue Possible Causes Potential Impacts Example Controls

Safety and health Worker injury during closure execution

Asbestos, exposure to hazardous materials, inexperienced demolition crew

Injury, loss of life, company reputation, financial loss, regulatory penalties

Effective health and safety, safety and change management program, use of qualified people

Public injury postclosure

Subsidence of underground workings, open pits, high-wall failure, unsecured open voids, standing water

Injury, loss of life, company reputation, financial loss, regulatory penalties

Engineering design eliminating hazard, controlled access, public education, monitoring program, maintenance plan

Environment Water contamination Acid rock drainage, metal and salt seepage from waste rock/tailings/pit/underground workings, hydrocarbon soil/water contamination from poor operations practices, water catchment overflow, erosion, pit lake water quality deterioration

Third-party legal action, extensive remediation postclosure financial loss, relinquishment delay, loss of company reputation

Long-term water monitoring programs, baseline data collection, preventive actions during operations, adequate closure design criteria

Water balance, water management

Inadequate quantitative water balance, poor storm design criteria, climate change

Uncontrolled discharge, legal action, penalties, contamination flow off site, overflow or failure of dams, catchments, injury or loss of life, financial loss, loss of reputation

Baseline climate and water data studies, quantitative water balance inclusive of water quality issues, understanding of surface/groundwater interaction, proper storm design criteria, climate change risk analysis

Air Improper air pollution control during operation (dust/stack emissions), decommissioning activities, inadequate cover/vegetation, improper void management

Soil contamination off property, financial loss, third-party lawsuits, loss of company reputation, community complaints

Effective air control programs during operations and closure execution, monitoring cover design criteria

(continues)


Table 16.7-3 Common closure planning risks (continued)

Type Closure Risk Issue Possible Causes Potential Impacts Example Controls

Environment (continued)

Tailings and landform failure

Slope failure, visual impairment, soil loss, storm erosion, vegetation failure, fauna habitat impaired, unsustainable ecosystem, seismic stability

Water contamination, financial loss, nongovernmental organization and community complaints, loss of company reputation, delay in relinquishment

Adequate baseline studies, rigorous engineering criteria development inclusive of ecosystem considerations and stakeholder desires

Tailings and waste disposal

Geochemistry of rock dumps, tailings. On-site disposal of hazardous waste, long-term stability compromised by seismic or erosion events, radiation isolation, unknown hazards in landfill

Long-term water treatment, financial loss

Adequate environmental impact studies, qualified expert consultation, engineering criteria development

Failure of remedial plan or closure activity

Poor execution by third-party contractor, soil or water contamination more serious than anticipated, vegetation failure

Financial loss, regulatory penalty, delay in relinquishment

Due diligence of third-party contractors, appropriate indemnities and insurance, independent review of high-risk plans, adequate environmental studies, and pilot testing

Community Employee Union strife, management retention during decommissioning, rehabilitation, and postclosure

Company reputation, access to qualified employees for closure project and future projects

Redundancy/severance planning, training programs, incentives for retention/hiring qualified personnel

Local community outrage

Loss of income, real estate devaluation, population decline, loss of tax base, unrealistic expectations of mining company viewed as “deep pockets,” failure of third party to maintain infrastructure handed over postclosure, safety hazard postclosure

Socioeconomic disruption, poverty; relocation of population; loss of emergency, medical, and educational services; company reputation; access to new projects; financial loss; long-term liability returns to company

Proactive community planning over entire life cycle, economic development partnerships, education and regular information updates to external stakeholders on LOA plan

Financial and legal Government requirements change

Current regulations not clear, changes over time, sudden changes with change in government party. Common considerations: pit backfilling, sulfate limits for water discharge, return to original contour, unacceptable postclosure land use

Closure plan inadequate, financial loss, inability to achieve completion

Engagement of government and nongovernmental organizations, monitoring of regulations, obtaining government sign-off incrementally, participating in industry forum, adjusting LOA plan as required (including consideration of early closure)

Loss of reputation/third-party actions

Contamination of surface water, groundwater, air; relinquishment of closed property to third party unable to provide proper care and maintenance; exposure to workers and public during operations and closure

Financial loss through payment of compensation, return of property and liabilities after relinquishment, loss of reputation, environmental penalties, and other statutory penalties

Thorough risk-based remediation, external review of third parties and appropriate sign-off, monitoring programs during operations in closure phase

Inadequate provisioning

Failure to consider all possible risks/contingencies including tax consequences. Common shortfalls: long-term water treatment costs, soil remediation costs, lack of topsoil and cover availability, inadequate estimate of postclosure monitoring time period, inadequate project management, overestimation of salvage value

Financial loss, misstatement of financial report, poor business decisions

Use of standardized risk assessment processes throughout the asset life cycle, audit and other assurance activities, review by legal and tax experts, closure project planned and executed by project management professionals

Sterilization of resource Untimely execution of closure Resource not available when commodity price rises

Use of standardized risk assessment to evaluate closure decision


Table 16.7-4 Life-cycle closure plan comparison checklist

Life-Cycle PhaseConcept Phase and Prefeasibility Study

Feasibility Planning and Execution/Project Construction Operating Phase

Closure Execution Phase—Decommissioning and Postclosure

General considerations

Closure options are considered in these early study phases of an asset. If a study phase involves pilot testing, drilling, or other actual land disturbance, a closure plan is prepared to address any liabilities created.

A preferred conceptual closure plan for the asset is generally selected during the feasibility phase. As soon as construction of the mining asset begins, land disturbance is created and a closure plan and closure cost estimate should be in place and regularly updated to accurately reflect the closure liability as it is created.

Operation is usually the longest phase in the asset life cycle. A life-of-asset (LOA) plan is updated annually and addresses all closure liabilities by integrating the asset business plan, progressive rehabilitation plans, and closure activities to be executed at cessation of operations.

Following the announcement by management that operations have ceased, the closure plan becomes a project to be managed according to standard project management principles. The closure project does not end until relinquishment of the property has occurred.

Closure plan class Preparation of a conceptual class of closure plan and cost estimate ±50% to 30% to support project evaluation. Expectation of progressive improvement in uncertainty and annual review of cost estimates. When asset has less than 10 years of life remaining, upgrade closure plan and cost estimate class to prefeasibility/feasibility level.

Transition to prefeasibility/feasibility-level closure plan and cost estimates, e.g., ±20% to 15%

Execution level closure plan and cost estimate, e.g., ±10%

1. Basic closure planning actions

The following applies to closure planning in all phases of the life cycle: � Identify fatal flaws in operation plan that would prevent compliance as a result of closure. � Identify information gaps, update plan, and schedule to rectify. � Establish current government and other stakeholder requirements.

2. Completion criteria and exit strategy

� Identify likely completion criteria. � Outline completion strategy.

� Establish completion criteria and preliminary relinguishment sign-off process through studies and stakeholder engagement.

� Refine and implement relinquishment sign-off process.

3. Stakeholderengagement

� Establish stakeholder identification register. � Identify stakeholder issues. � Outline concept of how stakeholders are to be engaged.

� Prepare, maintain, and implement community relations plan that includes community consultation with respect to closure issues.

� Implement community relations plan focused on decommissioning, postclosure, and completion issues.

� Confirm community acceptance of closure actions for completion.

4. Closure risk management

� List closure risks identified in order of priority. Formally assess top closure risks to avoid fatal flaw issues.

� Conduct formal qualitative closure risk assessments. � Establish and update a documented closure risk register.

5. Closure plan cost estimate

� Document basis of closure cost estimates. � Document use of deterministic and probabilistic methods used. � Confirm that closure cost estimates are risk based and clearly tied to closure plan, i.e., expected value at the appropriate accuracy level for risk management.

6. Government � Prepare an overview of requirements.

� Generate a register listing requirements and high-level plan for compliance.

� Generate a register listing completion criteria requirements with plan, schedule, and cost for compliance.

� Obtain formal acceptance for and implement the relinquishment sign-off process.

7. Environmental baseline for issues affecting closure

� Identify baseline issues including preexisting contamination, sensitive ecosystems, and biodiversity.

� Implement baseline study plans fit for purpose. Compile information and use to plan for additional work as needed.

8. Postclosure land use

� Describe current land use. � Conceptualize postclosure land use for project and alternatives.

� Identify land tenure risks and issues for closure.

� Plan for additional information needed.

� Plan for stakeholder engagement on postclosure land use.

� Determine detailed land capability/postmining/postclosure land-use alternatives.

� Discuss postclosure land-use alternatives with stakeholder engagement.

� Prepare a preliminary LOA plan that includes postclosure land-use issues.

� Include postclosure land-use goals when LOA and closure plan are integrated into business.

� Progressively evaluate rehabilitation against final land-use status (species regrowth, fauna assemblages, etc.).

� Validate land-use status against closure completion criteria.

� Document how postclosure land-use goals are met.

(continues)





9. Water management � Describe current surface and groundwater status.

� List broad closure water management goals.

� Identify on-site and off-site water-related risks.

� Establish storm design criteria.

� Prepare a conceptual water management plan to address on- and off-site risks including• Surface and

groundwater,• Impact on quantity, and• Impact on quality.

� Finalize landform drainage plan.

� Generate a preliminary monitoring plan.

� Assess on- and off-site risks. � Determine postclosure goals including final use and completion criteria for dams and voids.

� Clearly define and document water completion criteria.

� Progressively update current water status report including• Surface runoff patterns,• Storm sizing criteria,• Aquifer delineation,• Surface and

groundwater quality and quantity.

� Evaluate and validate status against closure completion criteria.

� Schedule and cost pollution prevention and remediation plans.

� Schedule and cost monitoring plans.

� Quantify final landform and drainage patterns (including creek diversions, dams, future flooding impacts).

� Implement closure water management, remediation plans.

� Decommission and/or rehabilitate any water facilities (wells, boreholes, dams, canals, diversions, etc.) that are not part of postclosure land use.

� Monitor and evaluate progress toward final hydrology and water quality completion criteria.

10. Plant/infrastructure

� Identify major infrastructure and define footprint.

� Prepare a conceptual decommissioning plan including what infrastructure will remain in place postclosure.

� Summarize demolition and decommissioning quantities.

� Identify off- and on-site disposal needs.

� Establish rehabilitation plan for footprint and adjacent areas.

� Progressively update decommissioning plans and cost estimates.

� Monitor salvage value and adjust closure cost estimate as required.

� Perform decommissioning. � Perform remediation if necessary.

� Monitor and evaluate progress toward completion.

11. Overburden/rock piles, tailings dams, open-pit features

� Describe quantity and quality of material.

� Conceptualize alternative locations and forms identified.

� Conceptualize disposal and closure methods described.

� Quantify volumes. � Quantify types including acid generation potential.

� Prepare topsoil stripping and management plan.

� Prepare preliminary LOA plan for dumps, tailings, pit features.

� Generate LOA plan to include• Final slope angles;• Structural safety defined

for tailings and rock/overburden piles;

• Water and sediment control features;

• Structural stability including settlement, subsidence program;

• Facility closure and rehabilitation methodology (impoundment capping, revegetation, final void);

• Topsoil and other cover material plan;

• Rehabilitation schedule; and

• Configuration.

� Revise and update LOA plan in conjunction with development of closure plan annually.

� Progressively monitor final voids (including borrow pits and quarries), and report against closure goals.

� Regularly address gaps found in integrated LOA plan, progressive rehabilitation plan, and closure plan.

� Perform rehabilitation. � Perform remediation if necessary.


12. Waste and chemical management

� Identify types of chemicals used.

� Identify types of waste to be generated.

� Describe general management and disposal plan.

� Quantify chemicals. � Quantify waste generated.

� Generate chemical spill prevention and management plan.

� Develop waste management plan.

� Develop spill prevention and response plan.

� Develop rehabilitation plan for on-site waste disposal facilities.

� Track waste generation and annual disposal capacity against plan.

� Quantify accumulation of waste on-site.

� Develop soil decontamination plans.

� Document disposal plans for cumulative waste over operating life and at closure.

� Implement soil decontamination plans.

� Implement closure waste disposal plan for project.


(continues)

Table 16.7-4. Life-cycle closure plan comparison checklist (continued)


Closure risks are very site specific and must be assessed by a cross-functional team familiar with the site and issues. However, there are a number of risks issues that are com-monly encountered. Table 16.7-3 may serve as a helpful guide to brainstorming site-specific closure risks.

LIFE-CYCLE CLOSURE PLAN COMPARISONTable 16.7-4 provides a comparison of how the closure plan should change as the mineral development project moves through the life cycle from a study project and feasibility plan into the lengthy operating phase and ultimately to the closure phase. The table is not meant to be exhaustive but can be used

to prompt discussion and develop a high-level checklist to ensure that closure plans contain the correct level of detail as the mineral development project progresses.

ACKNOWLEDGMENTThis chapter was drafted with the assistance of Gary Bentel, geotechnical manager, BHP Billiton.

REFERENCEAS/NZS 4360:2004. Risk Management. Sydney, NSW:

Standards Australia International; Wellington: Standards New Zealand.




12. Waste and chemical management (continued)

� Identify gaps between generation and disposal capacity.

� Identify off-site disposal facilities.

� Within 3 and 5 years of projected management decision to close, finalize detailed closure waste disposal plan.

13. Haul roads and access roads

� Identify road system. � Identify roads to remain at closure and likely completion criteria.

� Conceptualize rehabilitation plan for roads.

� Formalize completion criteria for roads to remain at completion of closure.

� Develop progressively more detailed rehabilitation plan for roads.

� Perform progressive decommissioning of roads where feasible.

� Perform decommissioning and rehabilitation of roads that will not be retained.

� Configure roads to be left upon completion of closure for long-term use.

� Perform remediation if necessary.


14. Air quality management

� Identify baseline air quality status.

� Describe project risks including air contaminant impact off- and on-site at closure.

� Conduct baseline air monitoring to establish air quality key performance indicators.

� Prepare air-quality management plan for minimizing on- and off-site impact.

� Develop a mitigation plan for surface treatments and revegetation to reduce dust and odor in accordance with key performance indicators at completion.

� Complete surface treatments and revegetation to meet air quality key performance indicators at completion.

15. Underground workings

� Describe subsidence- control issues.

� Describe water management issues.

� Identify underground workings areas.

� Prepare LOA subsidence management and mitigation plans.

� Prepare LOA underground water management plans.

� Develop underground decommissioning plan.

� Develop long-term subsidence management plan.

� Implement project plan for decommissioning underground workings.

Table 16.7-4 Life-cycle closure plan comparison checklist (continued)

111

Technology

closure planclosure

integrated closure planning

sustainable closure

closure process

closure planning means

closure waste

closure planningevelyn

closure planningof