Mine Rehabilitation: An Economic Perspective on a Technical Activity

A key concern both in public perceptions of the environmental performance of the mining industry and in the development of policy relating to mining activities is the state in which the areas may be left at the completion of mining operations. There is, in effect, concern that the transient economic benefits of mining are enjoyed by the few, while the 'scars' may remain for all. While the techniques of mine rehabilitation have improved rapidly in recent years, an important set of economic issues has generally been neglected.In this paper, the economic and policy aspects of mine rehabilitation are examined. The key issue addressed is how to determine when expenditure on rehabilitation should stop. The answer to such a question requires consideration of the full range of social, as well as private, costs and benefits of rehabilitation at a particular site. Clearly these costs and benefits will vary between sites. From both an economic and policy perspective it is important to establish whether the additional gain from more rehabilitation would exceed the additional cost.It is concluded in the paper that the technical feasibility alone does not justify a paeticular level of rehabilitation activity and expenditure. While more rehabilitation at a particular site may be technically feasible, the additional expenditure incurred in undertaking that rehabilitation may result in little extra benefit. This conclusion has important implications for government policy, particularly with respect to establishing the goals for rehabilitation, criteria for successful rehabilitation and enforcement of rehabilitation objectives.