The Government of Alberta is moving forward with a number of enhanced reclamation initiatives to improve clarity, security, and environmental performance within the oil sands and coal mining sectors.
A significant part of this change is an update to the Mine Financial Security program. The new mine financial security program takes an asset-to-liability approach which recognizes the resource value - whether bitumen or coal - as an asset in terms of cash flow. For new mines, a base security will be collected early in the mine’s life, when the risk of mine closure or abandonment is at a minimum. Full financial security will be collected later in the mine’s life, but before assets are completely reduced. For mines already operating, existing security held by the province will be held as base security.
Over the long term, the total security amount collected will be considerably higher than with the previous approach. All oil sands mines, including those previously providing security at older rates, will now provide security based on full reclamation costs. Oil sands processing plants located on mine sites are also now covered under the program.
During implementation of the new reclamation security program, it was determined that the minimum base security for each operating oil sands facility would be the larger amount of a) the base security for facilities under the new program or b) the amount on deposit at the time the program was implemented. As a result, the government has retained more base security for some facilities than others. As mining proceeds at each mine, full financial security will be collected for all facilities in the same manner through the new security deposit requirements.
For more information on Reclamation and the Mine Financial Security Program, visit: http://esrd.alberta.ca/lands-forests/land-industrial/reclamation-initiatives-in-alberta/default.aspx