The International Council on Mining and Metals (ICMM) is an international organisation that brings together 27 mining and metal companies and over 30 regional and commodities associations to strengthen environmental and social performance and enhance mining's contribution to society. The ICMM Closure Working Group, made up of closure specialists from ICMM company members, developed an information document on the financial concepts for mine closure for use by ICMM members and the wider industry to communicate and enhance the understanding of key financial concepts as they relate to mine closure. Several types of cost estimates are used to characterise the financial aspects of closure. As understanding of these approaches vary, consistent communication and engagement within companies and with external stakeholders is challenging and limits the industry's ability to benchmark performance. It is important for mining companies to make clear distinctions between the different types of cost estimates as they serve different purposes. While much of the underlying source information for each of these estimates should be based on the most recent version of the mine closure plan, the numerical values are typically different as each responds to different user needs and will be prepared under different sets of frameworks. Understanding the differences and points in common for these types of estimates is key to the efficient use of information and to providing useful estimates. The document defines and contextualises the key concepts related to closure costing, accounting and reporting requirements, and the purpose of each. The document is intended to provide general conceptual guidance across a wide range of factual circumstances.
Unplanned/Sudden -operations close due to economic market changes, company finances, technical or structural failures or temporary closure.Projects have to be prepared for both of these scenarios.
Miners worldwide are making large investments in innovation with a view to developing safe, efficient, and more productive mines. This in the face of a decline in ore grades, situated deeper, in challenging geographies and settings. Some miners are making very long-term investments in the management of future closure costs through careful planning and execution designed to protect the balance sheet. However as demonstrated by the recent Brumadinho tailings dam failure in Brazil, even partially "closed" facilities pose significant risk. This shows us that planning and properly executing closure measures during operations as a life-of-mine process is imperative if we are to sustain the industry and provide ongoing support of the communities where we operate. While operational innovations are receiving a great deal of attention to contain operating costs, the effort to keep a lid on the post-mining costs has not been as effective. However, there are exceptions and "integrated mine closure" is becoming more prevalent as a goal of industry. This paper explores the measures that need to be taken by mining companies to impose rigour on the closure planning and provisioning process, with the intention of both planning for closure, and in accounting for closure liabilities more effectively. This will be a dramatic departure from "free cash flow" optimisation, but may point the industry to a more sustainable future across its stakeholder base. Management Operating Systems (MOS) are well established in the mining industry, but are not typically applied to the discipline of closure planning. Currently closure planning is often overlooked within the short-term planning and operational management decision-making processes. By linking people, process and technology in a systematic way that captures mine closure planning and integrating this into the MOS, particularly with life-of-mine planning, significant closure outcomes will be achieved, reflected in company value and ultimately sustaining the industry's social licence to operate via a positive legacy.
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