TORONTO - The environmental and social costs of closing and rehabilitating old and abandoned mines around the world are likely in the trillions of dollars, and far beyond the capability of mining companies alone to deal with, Sir Robert Wilson, chairman of London-based metals giant Rio Tinto Plc said this week.
Wilson told Reuters at a mining industry conference on sustainable development in Toronto that a recent estimate puts rehabilitation costs just in the United States, where regulation is stricter than in many other countries, at $35 billion. "If you look at where the real problems are, in Russia, Eastern Europe, South Africa, India, China, the extent of the (mine) legacy issues is enormous, and it's totally beyond the capability of this industry, either financially or technically, to make a meaningful contribution to that," Wilson said.
"Huge" and "gigantic" were other terms being tossed around to describe the problem of old and abandoned mines at the three-day Global Mining Initiative meeting in Toronto, which is being held in preparation for the World Summit for Sustainable Development in Johannesburg in August.
But attempts were few at fixing an exact cost on what the industry calls "legacy issues" - the environmental destruction and tears in the social fabric left over from a 100 years of mining projects that no one has taken responsibility for.
And they are still happening, some experts at the conference said.
James Kuipers, of the U.S. Center for Science in Public Participation, which provides technical services to local and tribal governments, said his group estimates that 95 percent of operating mines in the United States have only vague plans for dealing with the environmental consequences of shutting down, such as the pollution of local water courses.
He said that in cases where owners have just walked away or gone bankrupt, it is the taxpayer that has been stuck with the liability.
"The public no longer favors new mining in the United States, and mistrusts existing mines," he said.
Wilson told Reuters that most large, established companies are able to come to terms with mine closures. Rio Tinto and several other big companies make serious provisions for environmental and social rehabilitation as the planning stages of their projects, he said.
"But there are some particular areas of concern for large gold operations in the United States, which have got quite a substantial environmental legacy," he said. "I know that is worrying one or two companies quite a lot in terms of the potentially very large liabilities that will be crystallized on closure. There are going to be some companies that are going to be sweating on this a bit."
There have been major problems with cyanide pollution at gold-mining operations in the western United States.
Many delegates at the conference stressed that governments must become more involved in the issues of mine closings and Kuipers suggested taxing metals consumption to help pay for the clean-up.
Some said a global closure fund should be created with contributions from industry, government and institutions. But World Bank official Monika Weber Fahr, who noted that the World Bank is the No. 1 source of mine-closing finances, warned that knowing there is a back-up would encourage irresponsibility.
"It should be the polluter that should be paying," she said.:
