Abstract:
In this dissertation I comparatively analyse the various financial guarantee instruments
for mine closure in relation to the interests of medium sized mines. I do this not to
compare each instrument against each another but rather in order to ascertain which
instruments are more beneficial to medium sized mine companies when included in a
state legislation or a contract. Mine closure is clearly a certainty for all mines, however
acquiring sufficient funding in order for holistic closure to occur has always been
problematic. Thus the use of financial guarantee instrument may mitigate such
concern and streamlining the choice will lead to attaining the holistic mine closure
objectives.
In chapter 1 I trace the history of mine closure as concept which has developed since
the 1870s and I illustrate how the concept of mine closure has taken into consideration
technical, social and environmental aspects. I do so in order to reinforce not only the
scope of mine closure but to further emphasise the progression of the concept. Finally,
I establish the current concept of mine closure, representing a meticulous concept
comprising of far more than the traditional physical closure. Arising from this
meticulous notion I discuss in chapter 2 the need for funding mine closure as the
foremost concern regarding mine closure. I highlight the key justifications for the
necessity for funding, I discuss the likely sources of such funding and I argue with
whom the responsibility of funding falls onto. As the substantive core of this paper, in
chapters 3 and 4 I introduce the most commonly opted for financial guarantee
instruments and the most significant interests of medium sized mines regarding the
financing of mine closure respectively. I deliberate concisely on each of the following
instruments, namely: letter of credit; surety bond; cash trust fund; insurance scheme
and self-guarantee and I discuss very briefly the most significant interests, namely:
profitability, liquidity, accessibility, corruption and tax implications.
Finally in chapter 5 I analyse and compare the discussed financial guarantee
instruments for mine closure against the interests of medium sized mines in order to
establish which are the most beneficial to the medium sized mine company in the
completion of holistic mine closure.
