Financial Assurance Reforms – Pooled funds and the new role for Insurance Bonds
Author: Johanna Kennerley, Senior Associate
Mine rehabilitation and financial assurance (FA) is a hot topic at the moment, with many discussion papers and inquiries being undertaken by various levels and departments within government, including:
The Commonwealth’s senate inquiry into mine rehabilitation (as it relates to Commonwealth responsibilities);
The recent Queensland Treasury Commission’s ‘Review of Queensland’s Financial Assurance Framework’ (QTC FA Review) that reviews the FA regime in Queensland and across many jurisdictions, and provides a recommended solution for Queensland known as the ‘Tailored Solution’;
The Queensland Government’s discussion paper ‘Financial Assurance Framework Reform’ (FA Discussion Paper) which further considers the QTC’s Tailored Solution and seeks public comment on the recommendation; and
The Queensland Government’s discussion paper ‘Better Mine Rehabilitation for Queensland’ (Rehabilitation Discussion Paper), describing the new and improved obligations on resource companies to rehabilitate land post closure, in conjunction with the FA reforms.
This paper aims to provide detailed analysis regarding the proposed changes to Queensland's FA regime, with specific consideration of the operation of the new pooled rehabilitation funds and the expansion of products available to provide third party surety for FA obligations.