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State governments calculate the required rehabilitation bonds using a standard formula but Dr Erskine said the mining companies work off their own, and often very different numbers.

“The rehabilitation costs held independently by the mining companies are often much larger than the rehabilitation bonds paid to state governments,”

“what we see are mines placed into care and maintenance where the mining companies can avoid paying out rehabilitation bonds because the mine isn’t officially closed.”

Industry insider warns taxpayers may foot bill for mine rehabilitation unless government, industry step up ABC TV  Landline 

An environmental scientist who works with the mining industry has broken ranks to warn that Australian taxpayers will be left with a bill running into tens of billions of dollars unless government and industry start taking mine rehabilitation seriously.

Key points

• More than 50,000 abandoned mines in Australia
• Scientist says mines must be rehabilitated
• Report says rehabilitation bonds ‘insufficient’
• Concerns over Peabody Energy’s plummeting share price prompts rehabilitation bonds questions

Dr Peter Erskine from the University of Queensland’s Sustainable Minerals Institute said although state governments hold financial securities for mine rehabilitation, they are nowhere near enough.

Across Australia there are more than 50,000 abandoned mines — a legacy of the early mining days when resource companies simply walked away when the profits dried up.

To avoid repeating its past, Dr Erskine said Australia must ensure that operating mines are properly and progressively rehabilitated while they are turning a profit.

What is in the rehabilitation kitty?

Queensland holds $5.38 billion in rehabilitation securities, in the form of cash or bank guarantees, and New South Wales holds $1.8 billion.

But Dr Erskine said it will cost between three to 10 times that amount to ensure mines are rehabilitated so that:

• Pollutants do not contaminate surrounding lands and waterways
• The landform is safe and stable for cattle to graze and
• The rehabilitated land is sustainable

He said when companies apply for a mine approval they agree to a range of rehabilitation targets, but the terms are vague and allow a lot of flexibility over the life of the mine.

“What I see happening is a steady downgrade of what the rehabilitation will look like throughout the life of a mine,” Dr Erskine said. “Returning the land to a productive use like cattle grazing is a very different proposition to creating a native ecosystem which is thought to be a lower risk proposition for the mining company.

“You don’t have to worry about cattle or farmers walking on unstable land.”

Dr Erskine is hired by mining companies to assess their rehabilitation and works on mines in Queensland and NSW.

“We’re seeing less and less hectares rehabilitated,” he said.

“And of that old rehabilitation, I don’t see it meeting the objectives that the Government and the mining companies have stated. So that’s safe, stable, non-polluting and sustainable.”

State governments calculate the required rehabilitation bonds using a standard formula but Dr Erskine said the mining companies work off their own, and often very different numbers.

“The rehabilitation costs held independently by the mining companies are often much larger than the rehabilitation bonds paid to state governments,” he said.

A 2014 Queensland Auditor General’s report found the bonds were “insufficient to cover the costs of rehabilitation” and in the case of one particular mine the bonds held were only 1.5 per cent of the estimated rehabilitation cost.

The report also found the government department overseeing mine rehabilitation was reluctant to claim the bonds for the state.

Peabody close to bankruptcy, fears about security bonds Peabody Energy, the world’s largest private coal company, has been hit hard by the fall in global coal prices.