Geotechnical News • September 2018
29
WASTE GEOTECHNICS
• AUD108 000/ha for tailings likely
to present moderate difficulties due
to reactive and/or soft tailings.
• AUD81 000/ha for benign and
strong tailings.
In addition, indicative unit costs are
provided for land preparation and
revegetation of AUD4 000 to 5 000/
ha, plus maintenance of rehabilitated
tailings of AUD300 to 40 000/ha,
increasing with decreasing rehabili-
tation performance from successful
rehabilitation to total rehabilitation
failure. Hence, the total Security
Deposit ranges from AUD85 300 to
215 000/ha, while the actual reha-
bilitation costs could be far lower if
undertaken progressively and making
use of suitable mine waste materials
as they become available, presenting
a large potential for cost savings. The
Security Deposit is typically covered
in the form of a Bank Guarantee,
which is based on a benchmark such
as the London Interbank Offered Rate
(LIBOR), plus a premium of around
0.3% per annum of its value, and its
duration, and would be expected to be
1.5 to 3% per annum of the Security
Deposit. While this rate is of a similar
order to the inflation rate, the Bank
Guarantee and budget to cover the
Security Deposit tie up funds that
could be used more productively.
The cost of a Bank Guarantee could
range from about AUD1 300 to 6 500/
ha per annum, which appears to be
small compared with the actual cost of
rehabilitation.
The actual cost of rehabilitating coal
tailings will depend on the difficul-
ties presented by the tailings and
the storage, and the availability and
cost of suitable capping materials.
It could take advantage of reduced
costs for material supply and haul-
age during operations, to be as low
as perhaps AUD50 000/ha, or lower.
The cost of a Bank Guarantee could
amount to AUD50 000/ha over 7.5 to
40 years, not accounting for inflation.
Effectively encapsulating potentially
contaminating coal tailings, accommo-
dating or improving their poor bearing
capacity, and progressive rehabilita-
tion using capping materials available
during operations, will translate to
substantial cost savings and greater
certainty about the rehabilitation of
coal tailings.
Conclusions
While high costs of large-scale mining
projects may necessitate NPV with a
high Discount Factor to secure financ-
ing, it is best not applied to tailings
operations and closure since it:
• Increases the risk of tailings dam
failures.
• Adds to the increasing threat to the
mining industry’s financial and
social licence to operate.
• Entrains excessive process water;
storing water rather than solids and
taking up more volume.
• Leads to wet and soft tailings
deposits.
• Potentially leads to unintended cu-
mulative impacts that are difficult
and expensive to rectify.
• Leads to difficult and high cost tail-
ings rehabilitation.
• Discourages tailings rehabilitation.
• Limits post-closure land use and
ecological function of tailings
storages.
• Distorts and increases actual Life-
of-Mine costs.
Professor David J Williams
Director, Geotechnical Engineering
Centre
School of Civil Engineering
Level 4, Advanced Engineering
Building, St Lucia Campus
The University of Queensland QLD
4072 Australia
T: +61 7 3365 3642 M: +61 417
193 591 F: +61 7 3354 4599
E:
W: geotechnical.civil.uq.edu.au
Figure 3. NPV comparisons at a Discount Factor of
2.5%, for a series of surface TSFs, including operational
and rehabilitation costs.
Figure 2. NPV comparisons at a Discount Factor of 10%,
for a series of surface TSFs, including operational and
rehabilitation costs.
