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Latrobe Valley Mine Rehabilitation Bond Policy

Communities and government expect that the full costs of mine rehabilitation are borne by the mine operator and not left to the taxpayer. To this end, the state expects to be financially assured for these costs through a rehabilitation bond.

Under the Mineral Resources (Sustainable Development) Act 1990 and the associated Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2013, mine operators are obligated to:

  • rehabilitate land that has been mined in accordance with an approved rehabilitation plan
  • enter into a rehabilitation bond with the form and amount to be determined by the Minister for Resources.

In accordance with Action 166 of the Hazelwood Mine Fire Inquiry: Victorian Government Implementation Plan, the Victorian Government has reviewed and updated its Rehabilitation Bond Policy as applied to the Latrobe Valley coal mines.

Key reforms to the Rehabilitation Bond Policy include:

  • calculating bonds using a new, independently developed Rehabilitation Liability Assessment Framework (RLA Framework) and Cost Calculator, commissioned by the Department of Economic Development, Jobs, Transport and Resources (DEDJTR). The RLA Framework uses a probabilistic methodology to assess rehabilitation liability
  • undertaking rehabilitation liability assessment every five years
  • continuing to set rehabilitation bond amounts that are equal to 100 per cent of an assessed rehabilitation liability
  • continuing to require rehabilitation bonds in the form of a bank guarantee, but allowing the Minister to consider bonds in a hybrid form, where the bank guarantee is complemented by a portion of the bond in the form of a Parent Company Guarantee (PCG) that meets certain conditions set by the state.

The full Rehabilitation Bond Policy for the Latrobe Valley coal mines is included below.