Mine re­ha­bil­i­ta­tion fund falls short

Pilbara News - - Resources - Nick Evans

■ 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.

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