Financial Guarantees are a financial deposit to be provided to the state by the mining operator to ensure that the closure cost are not transferred to the society. In the European Union the main regulatory framework are the Extractive Waste Directive 2006/21/EC and the Environmental Liability Directive 2004/35/EC. Are there available any reports, experiences or case studies on the determination and calculation approach of financial guarantees inside and outside of Europe ? Thank you in advance !
We call them performance bonds. I have used them several times after experience with gold miners suggested something had to be done. One miner just up and abandoned the site, left the rented dozer in the snow. The rental company had to come and get the dozer at a loss. The performance bond we included as a requirement in the work plan agreement provided enough funds to restore the site. I agree a financial guarantee or performance is a necessary part of doing business.
Had the SC Electric and Gas used a performance bond in the contract when building two nuclear power reactors, they would not have gone broke when the company failed to meet the contract. The electric users have had to bear much of this cost and SCEG was taken over by another more successful company.
Dear Petra
I'm not sure that this paper directly answers your question but it may be useful with regards to giving you an insight into what happens for some aspects of mining from a governance point of view in South Africa see: https://www.mdpi.com/2076-3263/7/4/101/pdf
Best regards
Darren
This may also be useful http://www.mrt.tas.gov.au/mrtdoc/dominfo/download/UR2005_07/UR2005_07.pdf
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