Minister extends moratorium on environmental bonds

Mines and Petroleum Minister Norman Moore said extending the moratorium on the bond increase was a responsible policy decision given economic recovery was still under way.
“The State Government continues to monitor the economic climate and while there are increasing signs of recovery there is a need to foster this recovery rather than introduce additional cost pressures at this time,” Moore said.
Environment bonds were first introduced to the State’s mining sector in the late 1980s as added assurance against companies failing to adequately rehabilitate mine sites.
The Liberal-National Government put the initial moratorium in place shortly after last year’s election to help mining companies ride out the economic downturn. The existing moratorium was due to expire in December 2009.
The Minister said it was unlikely that environmental bond rates would remain at their current levels and that the State Government planned to look at tougher rules to ensure industry met its obligations to rehabilitate mine sites.
“We want to encourage responsible resources development in WA. Increased environmental bonds will be a part of future requirements for the mining sector,” he said.
“However, we cannot entirely rely on bonds to deliver good environmental outcomes and that is why I have asked the Department for Mines and Petroleum (DMP) to consider what other powers need enforcing to complement a rise in environmental bonds rates.
“DMP will liaise with industry representatives and other stakeholders over the next 14 months to ensure that future arrangements achieve good environmental outcomes without unnecessarily constraining development in the mining industry.”
The decision has been welcomed by the Association of Mining and Exploration Companies (AMEC).
AMEC National Manager of Policy and Government Relations Darren Brown said the decision is both reasonable and sensible.
“The global financial crisis has significantly decreased access to capital for mining and exploration projects, particularly those operated by junior and emerging companies,” Brown said.
“In lean times such as this, extra costs in any guise can be the difference between a resources project going ahead or being shelved indefinitely - and obviously, an unrealised resource is about as useful as a car without fuel.
“While fanatical, so-called ‘pro’ environmental groups might jump up and down about the Minister’s decision to freeze environmental bonds, it is clearly in the best interest of all current and future Western Australian’s to encourage responsible resource development in the State.
“Sensible decisions such as this will help to restore investor confidence, which will in turn help expedite the long and risky process of converting our natural resources into royalties that ultimately pay for police, schools and hospitals,” Brown said.