5.3 Mining

The reclamation of a surface mine is often driven by the need to make the area safe and stable. This is particularly true for highwall mines. Rarely is the complete backfilling of a mine required or feasible. However, backfill and grading may be required to make slopes sustainable, to limit erosion or surface water impacts, and to prevent access. Revegetation and the removal of infrastructure may also be required. The activities common in mine reclamation may be straightforward, but the estimation and maintenance of a mine ARO are anything but. As in the case of landfills, the many variables associated with the timing and extent of reclamation activities could make the initial and subsequent measurement of an ARO challenging.

In a manner similar to the concurrent reclamation of landfills, concurrent reclamation of a mine site may occur. For surface mines, the removal of overburden (soil or rock between the ground surface and the resource extraction area) typically results in a large volume of material to be placed or managed. With concurrent reclamation, when a surface mine is expanded, overburden materials are placed in an area where mining has been completed. This is done to limit mine footprint and to backfill mining areas. A significant benefit of this approach is that it reduces the number of times from excavation to final placement that overburden is moved, thereby reducing or eliminating the need for temporary storage.

Concurrent reclamation at a mine requires accounting consideration. For example, a company must determine when to begin accounting for earthwork as a reclamation activity rather than as operational expense. Some mining companies may conclude that they should account for only the earthwork associated with the final pit footprint and capture the concurrent placement of overburden as an operating expense. Others may include the placement of overburden into the previous excavation as part of an ARO expense.

In a manner similar to the accounting for AROs related to landfills, any final grading and revegetation activities should be included in an ARO related to mining even when those activities are performed concurrently.

The mining method of processing through leaching is commonly used for the extraction of metals such as copper and gold. Leaching at a commercial mine can occupy hundreds of acres, creating both significant retirement obligations and potential environmental remediation liabilities. The leaching of metals through heap leaching involves the loose piling of extracted and crushed ore over a plastic-lined pad area (the “heap leach pad”). The closure of a heap leach pad requires the complete removal of spent ore, berms, pad liners, and all associated plumbing and processing equipment. In addition, if any ponds were created for the processing, these ponds must be drained, with all liquids treated and disposed of and all liners removed.

The removal of liners may result in the identification of soil contamination beneath the heap leach pad due to liner failures. This type of impact could meet the definition of contamination resulting from the normal operation of the asset when treatment is required at retirement and therefore part of the ARO. However, the failure of a berm on a heap leach pad, resulting in the sudden loss of process water and contamination of surrounding soils, could be an example of contamination not associated with normal operation, potentially creating an environmental remediation liability within the scope of ASC 410-30. While the cost of decommissioning and reclaiming an area used for heap leach processing may be estimable since the surface area and decommissioning activities required are known, the cost of any additional remediation may not be estimable before retirement.

In addition to the retirement obligations addressed above, the operation of a mine (particularly, the operation of on-site ore processing) can result in environmental contamination that is not associated with the normal operation and ultimate retirement of the processing facility. For example, consider acid rock drainage, a naturally occurring process in which rocks high in sulfide minerals are disturbed and exposed to rainfall and surface waters. The exposure of the sulfide minerals to air and water can result in the oxidation of the minerals and the formation of a low-pH acidic solution. When this chemical process occurs at a mine, either active or abandoned, it is called acid mine drainage (AMD). At an active mine, operational processes and controls may be in place to control the formation of AMD and to limit the off-site migration or flow of low-pH water. When these processes and controls fail, it is possible for contamination to leave the site, resulting in the need for remediation. Since this type of contamination may not be from the normal operation of the mine or is not associated with the retirement of the asset, the related remediation obligation may not be regarded as an ARO but may need to be treated as an environmental obligation that should be accounted for under ASC 410-30.