When a mine project comes to town, no one wants to talk about closure. The focus and excitement – and not just by the developer, but also by community leaders – is often focused on the jobs, taxes and local business supply opportunities to come.
However, mineral deposits are finite, and every mine will close one day. This inevitability plays out in stunning numbers and impacts for host communities throughout the US and worldwide every year. For example, over 60% of the 1,100 coal mines operating in the US in 2010 had closed by 2020.
In many jurisdictions, regulatory frameworks do require detailed plans to address closure, often requiring bonding to cover the cost of ‘fixing’ the environment impacted by the mine. But often, this only covers the physical environment – removing infrastructure, capping waste facilities, monitoring impacted water sources, planting trees and other appropriate vegetation, among other activities.
Left out of this scenario, all too often, are the people impacted by mine developments. Over time, the project may have moved infrastructure, such as roads and waterways. It will also undoubtedly have brought about other physical impacts that affect community members: holes in the ground, waste dumps, forest removal and increased infrastructure built to support expanded workforces.
Mining towns may thrive for decades and, seemingly overnight, the ‘engine’ keeping the communities alive is gone at closure.
Key points to think about…
Mining companies and host communities have made great progress in recent years in integrating community well-being and meaningful engagement as a critical success factor for new mining developments. But many of the closure plans we see in our work, for mature mines that will move to closure in the next 5-10 years, do not address the social and economic impacts of closure.
Key questions that need to be addressed and their potential solutions include:
- Given that jobs and supply contracts will cease, what capacity building or training plans are in place for affected communities to be able to tap into other, new markets? We’re working with communities hosting mining developments in Arizona and Minnesota that are looking beyond the benefits derived from mining investments, towards regenerative economic futures based on ecotourism, nature-based solutions and technology.
- If the mining operation caused resettlement, or if it resulted in populous influx around the mine, what plans and commitments are in place to support fair housing and maintenance of those affected? In one case, we’re helping a mining company to consider options for a reversal of traditional resettlement challenges, creating opportunities for those living in mining towns that will be at least partly stranded after closure without successful transition economies.
- Have the often invisible cultural and emotional impacts of closure been considered carefully and in full engagement with communities? And how can equitable and accessible closure plans ensure that these impacts are managed to minimise legacy risks over time? For a large mine in Brazil, we’re helping the operator evaluate claims from traditional people that have much more to do with impacts to their rainforest-home over the past three decades, and for the next generations, than with impacts that are visible and measurable at present.
- With the life of mine typically exceeding 30 years, how can we interest and engage communities in planning for ambitious but realistic futures that don’t rely on, but rather, leverage the benefits to be derived from the mining operation? One of our clients is asking its host community to envision their proposed re-activation of a closed mine as a step in its longer-term land use/economic development plan, to be largely funded by dedicated profit sharing from the planned reactivation.
Turning risks into benefits
With these points in mind, what can be done to minimise social impacts and maximise community benefits from closure?
- Plan for social closure from day one of the project. Consider an endowment or foundation that guards against over-building of infrastructure and de-risks a sudden decrease in property values.
- Socialise community and government stakeholders to think in terms of a finite economic ‘burst’. Help them to think about alternative socio-economic streams. If these are thought through and planned in advance, the new revenue streams may be healthy when the mine needs to close.
- Work with government and local communities to develop initiatives that are sustainable beyond the one host mine. And leverage, rather than rely on, shared benefits generated during the life of mine.
- Establish formal partnerships with government, other industries and community leaders to spread responsibility around for long-term economic growth.
- Consider establishing foundations or similar entities funded by mine revenue that builds an endowment fund to be used, explicitly, towards post-closure sustainability.
Without adequate forethought and careful consideration of the social outcomes of closure, decisions made by a company may have an adverse impact on the communities it relies upon well into the future.
It’s never to early to plan for closure
Taking time to think ahead about managing community risks and opportunities in closure plans, and ensuring adequate resources are in place through closure to do so, is now a critical element of responsible mining assurance.
We have learned from experience, and together we can set a new standard for responsible closure. Are you ready?
To continue the conversation, connect with Dean and Chris through the Acorn International Linkedin page.