Too costly to shut: Mine sales stumble on looming clean-ups

jueves 19 de mayo de 2016 17:00 GYT
 

* At least 3 deals collapsed over rehabilitation finance

* China's MMG faces $378 mln rehab cost at Century

* Anti-coal group sees rehabilitation bonds as too low

By Sonali Paul

MELBOURNE, May 20 (Reuters) - Major miners are trying to avoid hundreds of millions of dollars in closure costs by selling off pits, as cash is tight due to a prolonged commodities price slump, but the crippling cost of environmental rehabilitation makes it tough to seal deals.

Where mine sales have gone ahead, production is being prolonged, adding to oversupply in depressed markets, like coal.

Or in some cases, such as in nickel, producers are continuing to produce at a loss to avoid closure costs.

"As (rehabilitation) looms, the number gets bigger and bigger. It definitely is impacting the agenda of a lot of companies, even the big ones," said Gavin Buckingham, a partner with consultants EY.

In a cautionary tale, China's MMG Ltd had to hike its estimate of closure provisions more than 60 percent to $378 million for Australia's largest open-cut zinc mine, Century, just months before digging its final ton last year as the reality of what would be involved became clearer.   Continuación...