Mine rehabilitation fund falls short
■ The State Government’s Mining Rehabilitation Fund collected $22 million less than forecast last financial year, according to the Department of Mines and Petroleum’s latest annual report.
When Mines and Petroleum Minister Bill Marmion launched the scheme in 2013 as a replacement for the environmental bond system, the fund was tipped to pull in levies of up to $40 million a year, based on payments equivalent to one per cent of the rehabilitation cost of mine sites.
That would lead to a swift build of funds to $300 million to $500 million, with the interest on the pool destined to be used to rehabilitate some of WA’s estimated 10,000 abandoned mines.
In return, more than $1 billion of existing environmental bonds were released for use by miners and explorers.
But the DMP’s latest annual report shows WA miners contributed only $27 million in the fund’s first full compulsory year, $22 million less than the department had forecast.
The fund contained $35 million at the end of June, and earned $777,000 in interest last financial year. The DMP’s annual report said it cost $1.1 million to administer the fund, though that included set-up costs for its online reporting system, which will not be incurred in future years.
And rather than pull in revenue of $40 million a year, levies are expected to amount to only $25 million to $27 million a year, which means the fund could take up to two decades to reach its $500 million theoretical cap.
It is also likely to generate far less in interest payments than initially believed, based on a slower rate of growth.
DMP executive director environment Phil Gorey attributed the apparent shortfall to the fact that initial forecasts for payment into the fund were based on a draft set of levy rates circulated when the scheme was first proposed.
An initial four-year budget forecast was generated from the draft rates, but not updated to reflect the actual assessment rates gazetted in June 2013 after industry consultation, and when legislation establishing the MRF was passed by Parliament.
“Consistent with standard Government practice and recommendations of the Auditor General, DMP is negotiating to have figures forecast for future years updated, ” he said.
Dr Gorey said that DMP still expected to begin rehabilitating abandoned mines by the end of the year.
“Four pilot abandoned mine sites have been endorsed by the Mining Rehabilitation Advisory Panel and community and stakeholder consultation will commence on two of these before the end of 2015,” he said.