Mine closure cost refers to the total estimated financial expenditure required to safely decommission all mining and processing infrastructure, rehabilitate disturbed land areas to an agreed post-mining land use standard, manage ongoing environmental obligations (such as water treatment and acid mine drainage), and meet all regulatory and social requirements associated with the cessation of mining activities at a particular mine site. It is a significant financial liability that responsible mining companies are required to quantify, disclose, and provision for from the earliest stages of a project's life, in accordance with accounting standards (such as IFRS and GAAP) and the regulatory requirements of the host country. Mine closure costs in the bauxite, gold, iron ore, and diamond mining sectors vary enormously — from tens of millions of dollars for a small operation to billions of dollars for large, long-life mines with extensive surface disturbance, tailings storage facilities, and complex hydrogeological legacies. Key cost components include decommissioning and demolition of plant and infrastructure, tailings storage facility (TSF) rehabilitation and long-term monitoring, pit backfilling or slope stabilisation, topsoil replacement, revegetation, water treatment infrastructure construction and operation, removal of underground workings, and post-closure monitoring and maintenance programs. Mining companies are generally required by regulators to provide financial assurance (in the form of bonds, letters of credit, or trust funds) equivalent to estimated closure costs, to protect against the risk of companies abandoning liabilities. Under-provisioning for closure costs has historically been a significant issue in the global mining industry.
