Securities

As a condition of Mines Act permits, the permittee must provide financial security in an amount and in a form acceptable to the Chief Inspector of Mines. This security is held until the Chief Inspector is satisfied that all reclamation requirements for the operation have been fulfilled.

Because every mine site has unique management requirements and operational constraints, the assessment of financial security is done on a site-specific basis. The security is set at a level that reflects outstanding reclamation and closure obligations associated with the site. The amount of any security may be increased or decreased at the discretion of the Chief Inspector based on the risks at any time.

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

Reclamation Liability Estimates for Major Mines in B.C.

A summary of the reclamation liability estimated by major mines in their annual reclamation reports, current reclamation security held by the Ministry of Energy and Mines for these operations, and the calculated differential can now be found in the Annual Report of the Chief Inspector of Mines (beginning with the 2015 annual report, pages 36 - 39).

For more information on reclamation securities held by the Province, please read the Mine Reclamation Security in British Columbia Factsheet (PDF, 80KB).

Reclamation Security Policy Review

Following the May 2016 release of the Auditor General’s report on compliance and enforcement of the mining sector, the Province committed to reviewing its reclamation security policy, and that work is underway. As the first step, the Ministry of Energy and Mines (MEM) commissioned Stantec Consulting Ltd. to examine how jurisdictions in Canada and abroad deal with the issue. Stantec’s report is available below.

In addition, MEM and the Ministry of Finance commissioned Ernst & Young (EY), a leading auditing firm with experience and knowledge of the mining industry worldwide, to undertake an in-depth examination of reclamation securities practices. This work is now complete and includes a comprehensive examination of MEM’s current approach and further analysis of best practices. In its review, EY found that MEM utilizes a financial security program based on sound principles that include elements of a risk-based approach.

The EY report provides a good foundation and offers MEM some potential policy components to consider moving forward. This will require further analysis before MEM can finalize its reclamation securities approach. This work is currently underway and will be completed in 2018.

As B.C. works to improve its approach to reclamation securities, it is important to recognize that this is an evolving area of policy development not only in B.C. but in other jurisdictions as well—recent audits in Ontario, Alberta and Nova Scotia have identified issues such as lack of clear policy and insufficient security.