shortcomings of environmental assurance in mining and the use of insurance as a complement

CIM Edmonton 2004
Michel Jacques,
Abstract Rehabilitation of mined out areas is often enforced by environmental bonding. It is usually assumed that this process provides financial assurance that rehabilitation will be carried out as agreed at the permitting stage. WShortcommings of the current practice in environmental bonding for mining are reviewed. Of particular importance for the public, for the governments and for the environment is the absence of protection against cost overruns and company defaulting before the bond amount is entirely paid. Elements of solution are identified through the mergence of environmental insurance as a complement to bonding for cost overruns and defaults. A cover of environmental catastrophes could also be added, hence reducing the risk for the public and the nevironment. We examine the merit of creating a captive insurance company under the responsability of the mining industry. The use of insurance techniques would incorporate a genuine risk management dimension the the financing of rehabilitation.
Keywords: Bonding, Rehabilitation, assurance, insurance
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