The estimation of mineral reserves is primarily based on factors including mining, processing, metallurgical, and economic considerations. Although other factors, such as the environmental, social and governance, are given less emphasis in the reserve estimation process, their impact can be substantial in the conversion of mineral resources to mineral reserves, especially for mine projects or operations with a shorter mine life.
In light of this context, this article aimed to evaluate the use of closure plans and closure costs on the conversion of mineral resources into mineral reserves. Focused on Brazil, Chile, and Peru, the data utilized in this paper were from mineral reserve audits carried out about commodities such as copper, iron ore, gold, bauxite, and nickel. The analysis was based on the main requirements from the international standards for reporting mineral reserves.
The main findings from the audits are related to closure plans and closure costs based on conceptual studies, outdated closure plans relative to the long-term production plans, limited integration between the mine planning and environmental departments in the joint analysis of proposed production scenarios and their potential impacts on mine closure and, the absence of the progressive, closure and post-closure costs in the economic models used to evaluate the financial results of the project or operation. For the assets with an extensive life of mine, the estimates of closure costs usually did not have a significant impact on the economic results and, consequently, were not considered restrictive for converting mineral resources to mineral reserves.
Given the audits results, recommendations were provided to guide mining companies in adjusting their closure plans and closure costs as part of the process of applying the Environment, Social Performance and Governance modifying factor in the conversion of mineral resources to mineral reserves, manly for projects or operations with an estimated life of mine under ten years.
