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Global Lessons for a Local Problem – Rehabilitation Bonds and Victoria’s Latrobe Valley Coalmines


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Author M L Cramer and N P Wines


On 9 February 2014, bushfire embers landing on exposed coal in a disused pit at the Hazelwood mine in Victoria’s Latrobe Valley ignited a coal fire that burned for 45 days. The fire was the largest and longest burning mine fire to occur in the Latrobe Valley (Hazelwood Mine Fire Board of Inquiry, 2016). Two Victorian Government Boards of Inquiry have been held into the Hazelwood mine fire. The most recent, in 2015, included consideration of the regulation and implementation of rehabilitation practice at Hazelwood and the other two brown coalmines of the Latrobe Valley (Loy Yang and Yallourn; Government Gazette, 2015).

The 2015 Hazelwood Mine Fire Board of Inquiry commissioned Accent Environmental Pty Ltd (Accent) to undertake a review of the financial mechanisms for mine rehabilitation and closure adopted in Australia and overseas (Accent, 2015). Specifically, Accent was engaged to identify ‘any practical, sustainable, efficient and effective alternative mechanisms to ensure rehabilitation of the mines as required by the [Victorian] Mineral Resources (Sustainable Development) Act 1990’ in accordance with Terms of Reference 10 (c) (Government Gazette, 2015).

The review by Accent included consideration of a range of financial instruments such as bank guarantees, trust funds and insurance. It considered a number of financial assurance systems in operation in Australia, New Zealand, the European Union, Canada and the United States. These systems included:

  • full and discount financial assurance systems
  • predefined liability proportion systems
  • pooled fund systems
  • the use of post-closure financial mechanisms such as trust funds (Accent, 2015).

What lessons can be learnt from other jurisdictions? Are there financial mechanisms already in place that could allow the Victorian Government and the mine operators to manage the risk of rehabilitation default3, lower rehabilitation liability, attain site rehabilitation objectives and allow eventual site relinquishment?


Cramer, M L and Wines, N P, 2016.
Global lessons for a local problem – rehabilitation bonds and Victoria’s Latrobe
Valley coalmines, in Proceedings Life-of-Mine 2016 Conference , pp 24–27 (The Australasian Institute of Mining and Metallurgy: Melbourne).