Minnesota Financial Assurance Requirements for Non-ferrous Mining

Protecting State taxpayers with bankruptcy proof financial assurance

The State already requires mining companies to have bankruptcy proof financial assurance in place to cover all possible environmental clean-up cost before issuing a permit.

The State already requires detailed review of all the costs of potential environmental exposure annually, and adjusts the financial requirements of the company accordingly.

The State already has the authority to deny or revoke a permit if a company does not comply

Financial Assurance - Related to Permit to Mine

MS93.43 Commissioner shall require a bond or other security. Commissioner shall review annually.

Rules Chapter 6132

Current rules were put in place in the early 90's after many years of study and with input from all groups, including environmental groups.


To assure a source of funds if permittee fails to perform

All reclamation activity including closure and post closure maintenance if needed

Any corrective action, if required, for non-compliance

Required Components

Contingency Reclamation Plan

- Plan to reclaim if operator ceases in first year

- Based on 3rd party costs

- Based on current dollar value

- No salvage value includes

- Updated annually bases on size of project each year (becomes the plan to close and financially assure the site at any point in time)

Funding Sources

- A variety of sources, as deemed appropriate by the State.

State has the authority to approve the BEST source of funds

- Must be bankruptcy proof

- Must be continuously in place

What is Reclaimed

- Open Pits

- Tailing Basins

- Waste rock and surface material stockpiles

- Buildings and Equipment

- Revegetation of disturbed ground

- Wetlands by restoration, reclamation, or replacement

- Buildings and infrastructure no longer needed for any other use

Period of Time Covered

Long enough to cover time until:

- All reclamation activities completed

- Conditions necessitating post closure no longer exist

- Corrective actions (if any) have been completed

Adequacy Determination of Financial Assurance

- Assurance that the amount is sufficient to cover all reclamation costs (including closure, post-closure maintenance, and any ordered corrective action)

- Assurance that funds are available and made payable to State when needed

- That the assurance is valid, binding, and enforceable under law

- Assurance that funds are free from impact by bankruptcy

Management of Financial Assurance

- Permittee must annually estimate cost necessary to conduct contingency reclamation and corrective action plans

- Commissioner may hire third-party with financial assurance expertise

- Cost of expert paid by company

Permittee Released

Only when:

- All corrective activities are complete

- Conditions necessitating post closure maintenance no longer exist

- Corrective action (if any) have been completed

Permit to Mine Application

- Once it is deemed complete notice published in EQB

- Details of financial assurance are part of permit to mine application

- Permittee required to publish a notice once a week for 4 weeks after State notice

- Public has opportunity to review and comment for 30 days after last publication date

Standards to be Met

All features to be stable and shaped appropriately


90% ground cover after 3 growing seasons

Vegetation shall be similar to referenced site w/in 10 years

Timelines exist for when phases must be complete

Mine shall be closed and reclaimed to prevent adverse impacts to natural resources (determined by state and fed standards many under MPCA

Failure to Comply

- State has the authority to deny, suspend, revoke, or modify a permit

- State may also assess civil penalties

MPCA Role in Financial Assurance

- MPCA works with the DNR in determining amount of financial assurance and appropriate financial assurance mechanism

- MPCA has removal and remedial action authority