Rehabilitation bond calculator

The bond calculator provides a consistent methodology for estimating rehabilitation costs for extractive, exploration and mining operations.

The calculator also provides a useful tool to help operators to plan their operations by estimating site rehabilitation costs at the start of an exploration, mine or quarry project or well before completing resource extraction. The calculator can also be used to design the staging of an operation to minimise the area disturbed and to maximise progressive rehabilitation.

Mine or quarry operators are required to submit a bank guarantee to Earth Resources Regulation to cover the estimated cost of their site rehabilitation liabilities before starting site works, under the Mineral Resources (Sustainable Development) Act 1990. The rehabilitation liability is estimated based on third party contractor rates to cover the cost of site rehabilitation should the site operator default on their statutory obligations.

In February 2020, Earth Resources Regulation released its Regulatory Practice Strategy for the Rehabilitation of Earth Resources Sites, which foreshadowed work to update the rehabilitation bond calculator for mines and quarries.

Earth Resources Regulation has undertaken an extensive review of the bond calculator, which included engaging a specialist firm to compare costing rates used in bond calculators interstate, checking costing rates for key rehabilitation activities in the Victorian market and seeking feedback from local industry representatives.

Effective site rehabilitation underpins public confidence in the mining and quarrying sectors and the regulator. Bonds need to cover 100 per cent of the estimated cost to rehabilitate a site if an operator defaults on their statutory obligations. Earth Resources Regulation will use the bond to rehabilitate a site in such cases.

Authority holders can lodge bonds with Earth Resources Regulation in the form a bank guarantee issued by a bank registered by the Australian Prudential Regulatory Authority (APRA) to operate in Australia. Alternatively, authority holders can lodge cash bonds for sites with an estimated rehabilitation liability up to $50,000.

Bond calculator update

The bond calculator is updated annually to include current estimated costs for common site rehabilitation activities.

Updates to the calculator include:

• updating the costing rates for Consumer Price Index (CPI) changes
• providing alternative costing rates for some rehabilitation activities where there is a substantive difference between the CPI-adjusted rate and current market costs
• Improving the calculator by including other common rehabilitation activities such as monitoring and maintenance (e.g. dust control, water treatment and site security).

Earth Resources Regulation will implement a progressive program of bond reviews with an initial focus on the following priorities:

1. high risk sites nearing the end of their resource life and/or under administration, including sites where action may be required to protect public safety, land, infrastructure and the environment
2. sites subject to applications to transfer the ownership of licences and other authorities, including acquisitions and mergers
3. sites approved to expand their extraction limits or make other major expansions (e.g. enlarging tailings storage facilities)
4. sites that have self‐reported rehabilitation liabilities greater than their current bonds.

The updated bond calculator will be used to estimate the rehabilitation liabilities for all new exploration, mining and quarrying sites.

Note: Earth Resources Regulation encourages operators to continue to make other operational changes at their mine and quarry sites to improve production and safety. Applications for minor work plan variations or administrative changes will therefore not trigger a bond review.

The bond calculator is based on a risk-based approach, with an aim to encourage operators to plan ahead for site rehabilitation at a lower cost.

Operators can voluntarily request that their rehabilitation liabilities and bond amounts be reviewed and adjusted annually. This provides the opportunity to increase or decrease bond amounts dependent on the extent of site disturbance at any one time (as opposed to the maximum point of disturbance over the project’s life). For example:

• if an operator takes steps to progressively rehabilitate sections of a site as activities take place, the liability and therefore bond amount can be reduced to recognise the completed activities
• if a site is in the early stages of development and activities are of lesser impact, bond amounts can be calculated on that basis and be adjusted as production activities increase over time.

Download the calculator

Establishment and management of rehabilitation bonds

Find out more about our rehabilitation bonds policies and procedures and the methods used to assess rehabilitation liability for mining and extractive operations.

Further information

Exploration, mining and extractive industries authority holders can also contact Earth Resources Regulation’s Rehabilitation Liability Assessments and Bonds team at RLAB@deeca.vic.gov.au if they wish to discuss the requirements for their site(s).

Page last updated: 12 Apr 2024