The New South Wales Government requires companies holding titles under the Mining Act to lodge security bonds to ensure that the industry complies with the environmental conditions of exploration and mining licences and meets the cost of rehabilitation of its land disturbing activities. Security bonds ensure that the cost of rehabilitation of mining will be met by the mining company rather than the community through public funding.
Security Bonds are collected by the Department of Primary Industries-Mineral Resources (DPI-MR) and are retained until the Department is satisfied that rehabilitation outcomes and other lease conditions will be achieved without further involvement of the leaseholder at the site. The amount of the bond is designed to take into account the cost of rehabilitation and compliance with other lease conditions.
The level of security is calculated using current data on actual rehabilitation and earthmoving costs in different regions, and relates these to the amount and type of disturbance. The security level is recalculated approximately every five years in accordance with Mining Operations Plan (MOP) renewals.
The DPI-MR can release part of the security as work progresses throughout the life of the mine. This provides an incentive for the company to rehabilitate as work progresses. The residual security will still be sufficient to complete all anticipated rehabilitation.
Fines and other sanctions, including lease cancellation, can be imposed on companies failing to comply with lease conditions.