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Ministry of Energy Mines and Responsible for Core Review

Reclamation Costing and Security



Reclamation Liability Cost Estimates


Permittees are required to estimate the total expected costs of outstanding reclamation obligations over the planned life of the mine. This information must be submitted with all Annual Reclamation Reports.


British Columbia Mine Reclamation Securities


The Mines and Mineral Resources Division (MMD) of the Ministry of Energy and Mines (MEM) is responsible for the regulation of mining in British Columbia. The Mines Act and accompanying Health, Safety and Reclamation Code for Mines in British Columbia (the Code) provide the legislative framework and apply equally to all operations.


Legislation requires all mining operations to carry out a program of environmental protection and reclamation to ensure that upon termination of mining, land, watercourses and cultural heritage resources will be returned to a safe and environmentally sound state and to an acceptable end land use.


MMD is responsible for issuing and administering Mines Act permits. Before the commencement of any work in or about a mine, the owner, agent, manager or person acting on behalf of the company must hold a permit issued by the Chief Inspector of Mines (pursuant to Section 10 of the Mines Act).


MEM seeks to provide reasonable assurance that the Province will not have to contribute to the costs of reclamation if a mining company defaults on its reclamation obligations. As a condition of Mines Act permits, the permittee must post financial security in an amount and form acceptable to the Chief Inspector of Mines. This security is held by the government until the Chief Inspector is satisfied that all reclamation requirements for the operation have been fulfilled.


Every mine site has unique management requirements and operational constraints; thus, the assessment of financial security is done on a site-specific basis. The security is set at a level that reflects all outstanding reclamation and closure obligations. For example, mines that require long-term drainage treatment for metal leaching and/or acid rock drainage require full security to cover outstanding liability and ongoing management.


The Chief Inspector of Mines accepts the following forms of reclamation security: cash, certified cheques, bank drafts, term deposits (i.e., GICs), Government of Canada bonds and irrevocable standby letters of credit (ISLOCs).


Term deposits and bonds may be held in a Safekeeping Agreement where the interest accrues on the deposit. In some cases, funds may be deposited to the Mine Reclamation Fund (pursuant to Section 12 of the Mines Act) or within a Qualified Environmental Trust. These funds allow interest to accrue to the credit of the account. 


For ISLOCs, confirmation is provided by the client’s financial institution that sufficient funds exist and will be kept available by the financial institution to meet MEMPR's requirements.


Reclamation securities can only be released by the authority of the Chief Inspector of Mines.