Geotechnical News • March 2015
43
WASTE GEOTECHNICS
lenges, and the ongoing developments
of the regulatory context for closure.
The legal context
In order to understand the focus of
current closure laws in Chile, it helps
to understand the national importance
of abandoned sites. While mining
generally has a wide social acceptance
in the country, thanks to its role in the
economy and as a provider of well-
paying jobs, its long history has left
marks across the nation. The national
mining service (Sernageomin) has a
catalog of at least 1400 abandoned
sites. These include sites that are
located near to communities, and are
generating on-going impacts in the
absence of state funds earmarked for
their remediation (see Photo 1). While
programs have been developed to
identify, catalog and better rank these
sites by risk, funding for their reme-
diation and reclamation still seems
remote.
One of the first steps in the develop-
ment of Chilean closure law was in
1994, with the establishment of an
Environmental Impact Assessment
(EIA) system. While closure was not
directly addressed by the system, the
EIA for new mining projects was
expected to include the closure phase.
The next major step forward for mine
closure regulation came in 2002, with
the introduction of a new mining
security regulation. This regulation
established for the first time a require-
ment that all mines to present to
Sernageomin a closure plan by 2009.
The focus of the closure plan under
this law was on physical stability and
health and safety issues. Notably, envi-
ronmental issues were not covered, as
they were considered to be outside of
the jurisdiction of Sernageomin. By
international standards, the require-
ments were decidedly light.
This changed in 2012 with the
publication of a new closure law and
associated regulation, which dramati-
cally increased the role of the state.
Responding in part to public pressure
and increased attention to the large
number of abandoned sites in the
country, the new law explicitly laid
out a mission to prevent the future
generation of more abandoned sites.
This would be done by the by means
of financial guarantees provided by the
mining companies for each opera-
tion, provisioning amounts sufficient
to execute the site closure should the
owner default on their closure obliga-
tion – provisioning that is a relatively
common practice internationally,
and already applied in neighboring
Peru. The new law also makes one of
the first nods to the social aspects of
closure, obligating that closure plans
prepared under the new law indicate
when and how the closure will be
communicated to stakeholders.
The new law included a phasing-in
process. In the first phase, every mine
(over a minimum size threshold), that
at the time had an approved closure
plan, needed to provide by November
of 2014 a cost estimate for the execu-
tion of both the approved plan, and to
comply with any other closure-related
commitments that had been acquired
along the way through the EIA system.
Once the estimate has been approved
by Sernageomin, the mining company
would be required to provide a guaran-
tee for the amount, using one of the
approved financial instruments. Using
a formula that takes into account
remaining mine life and a discount
rate based on an independent state-
provided index, the present value of
the closure to be guaranteed is calcu-
lated. Initially, only 20% of the present
value needs to guaranteed, with the
amount gradually ramping up to the
full present value over two thirds of
the remaining mine life, or 15 years
(whichever is shorter). There are vari-
ous provisions for partial reductions
of the guarantee to promote progres-
sive closure, although it remains to be
seen how these will be applied in the
practice.
2015 promises to be an interesting
year for closure in Chile. As plans
are approved, mining companies
will begin to pay for the guarantees.
The total amount to be guaranteed is
estimated to be well over $30 billion
dollars, with the first year requiring
guarantees of 20% of that total. More
interestingly from a technical point of
view, the phase-in of the closure law
is now completed, and all new closure
plans, or updates to existing plans, will
be required to comply with the full
closure law, with adequate measures
included for promoting (or “guarantee-
ing” in the concerning phraseology
of the law) physical and chemical
stability.
Most notably, this will mean that
all closure plans must include a risk
evaluation for the principal installa-
tions, with closure measures defined
to mitigate the risks. Sernageomin
has provided a guide for conducting
this risk evaluation, which, while not
legally binding, is likely to be treated
as the rule. This risk evaluation guide
indicates that in the absence of specific
studies, the evaluation must consider
“worst case” scenarios. For example,
in the absence of geochemical char-
acterization, all waste rock should be
considered acid generating. As there
has been relatively little legal motiva-
tion for such characterizations in the
past, this could either mean a dramatic
upswing in characterization work
in the next few years in preparation
for the next updates, or significantly
more complex and expensive closure
plans as past assumptions of relatively
benign conditions are replaced by
more conservative assumptions.
A third possibility of course is that
it will be possible to “game” the risk
evaluation to give the desired out-
come, without providing the engineer-
ing fundamentals. It will largely sit
with the regulator to determine if this
happens or not. While a possibility, the
evolving sophistication of the authori-
ties makes this outcome less likely.
Technical challenges
Climate is a key driver in the selec-
tion of closure measures, and there
are few countries where that axiom
is more evident than in Chile. While
