Scope 3 emissions have long been one of the more challenging aspects of corporate climate action. They can represent a significant part of an organisation’s emissions footprint, but arise across the value chain and are often generated by activities over which an organisation has limited direct control.

A recent High Court decision adds an interesting dimension to that challenge.

In MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35, the High Court upheld the invalidation of the development consent extending the life of the Mount Pleasant coal mine in NSW.

A majority of the Court found that the Independent Planning Commission had not specifically considered whether conditions should be imposed in relation to Scope 3 emissions, as required under the relevant NSW planning framework.

Importantly, the decision does not mean that the IPC must impose conditions limiting Scope 3 emissions. Nor does it create a broad new obligation applying to projects across Australia.

The obligation under the NSW regime is to genuinely consider whether such conditions should be imposed. The ultimate decision about whether to impose them remains with the decision-maker.

Scope 3 emissions are inherently challenging because organisations often cannot directly control what happens upstream or downstream of their operations. And, as the case demonstrates, there may be legitimate reasons why conditions relating to those emissions are ultimately not imposed.

But “outside our control” is increasingly different from “outside our consideration”.

For resources companies operating in NSW, one of the practical lessons from the decision is therefore about analysis, evidence and documentation. Applicants need to provide sufficient information for decision-makers to properly consider Scope 3 emissions and the practicality of potential conditions. Where particular approaches are considered unworkable or commercially impractical, there is value in having a clear evidence base supporting that position.

There is a broader sustainability lesson here too.

As expectations around climate action mature, understanding Scope 3 emissions is becoming relevant to much more than calculating a carbon footprint. It increasingly intersects with project approvals, climate risk, decarbonisation planning, governance and the quality of information organisations use to support decisions.

The High Court decision is narrow in its legal application, but it reinforces a useful principle for climate governance more broadly: organisations don’t necessarily need to control every source of emissions to understand it, assess what influence they realistically have, and clearly document the decisions they make.

For sustainability practitioners, that may be the more interesting takeaway.

At IEMA, environmental, social and governance (ESG) performance is practical: understand the risks, act on opportunities and make sustainability part of everyday work. This approach guides IEMA’s employee-led ESG Committee, which turns good intentions into measurable action across our business, our people, and our community.

For a small business, the Committee demonstrates practical ESG leadership. It provides a dedicated forum to identify, prioritise, and progress initiatives that support IEMA’s values. In doing so, it helps embed sustainability into business decisions and workplace culture.

What is IEMA’s ESG Committee and How Does It Drive Sustainable Business Practices?

The Committee provides a structured forum for reviewing ESG priorities, tracking progress against objectives and reporting outcomes to company leadership, ensuring accountability and continuous improvement. It provides oversight, coordination and momentum for initiatives that reduce IEMA’s environmental footprint, strengthen employee wellbeing and safety, support the community, and integrate sustainability into day-to-day operations.

The Committee comprises four competitively selected roles: Chair, Wellness, Environment & Community, and Health & Safety. This structure provides dedicated oversight and clear leadership for each focus area, supporting a mature and well-governed approach to ESG.

Why Practical ESG Action Matters for Business Performance and Sustainability Outcomes

As sustainability advisors, IEMA believes it is important to demonstrate the behaviours and practices we recommend to clients. The ESG Committee helps ensure IEMA can lead by example, continuously improving our own environmental, social and governance performance while supporting better outcomes for our clients.

Effective ESG is about more than disclosure. It requires action, accountability and continuous improvement. The Committee helps ensure IEMA’s sustainability initiatives are prioritised, tracked and embedded into the way the business works, rather than treated as a tick-the-box exercise.

By bringing together employees from across the business, the Committee creates a practical link between IEMA’s sustainability strategy and everyday operations. It also helps identify ESG risks and opportunities across employee engagement, health and safety, carbon emissions, sustainable procurement, waste management, governance and community impact.

FY2026 ESG Initiatives: Delivering Measurable Sustainability and Community Impact

Reducing Food Waste and Supporting Communities Through Practical ESG Action

In FY2026, the Committee helped coordinate an OzHarvest Cooking for a Cause team event. IEMA team members prepared nutritious meals for local charities and diverted 35 kilograms of food from landfill, avoiding the equivalent of 35 kilograms of carbon dioxide emissions. This hands-on initiative combined food waste reduction, community contribution and team connection in a practical and memorable way.

Embedding Employee Wellbeing into Everyday Work Practices

The Committee champions initiatives that put people first. IEMA introduced Wellness Hours in May 2026, giving every employee two hours each month to recharge in a way that works for them, whether through exercise, time with family, an appointment or simply taking time to reset. Since the Wellness Hours initiative was launched, IEMA team members have logged 63 hours across activities supporting their physical, mental and social wellbeing, from exercise and healthcare appointments to family events, hobbies and community connection. The message is simple: employee wellbeing should be part of how we work, not something squeezed in after hours.

Strengthening Workplace Health and Safety Governance

Health and safety governance remain central to IEMA’s ESG approach. Throughout FY2026, the Committee has contributed to reviews of IEMA’s HSEC policy and business risk assessment, as well as updates to safety resources, training and certification registers, and safety notices. These improvements help keep IEMA’s systems current, practical and aligned with office, field and client-based work.

Improving Carbon Accounting, Emissions Data and Decarbonisation Performance

The Committee supports IEMA’s commitment to business decarbonisation through annual greenhouse gas emissions calculations, the identification of emissions hotspots and reduction opportunities, and process improvements that provide clearer visibility of the company’s carbon footprint. This includes strengthening year-on-year carbon accounting methodologies and moving from spend-based estimates towards more accurate activity-based data where possible.

Through improved carbon accounting and targeted emissions reduction efforts, IEMA reduced its FY2026 greenhouse gas emissions to 168 tCO₂e; an 18% reduction from FY2025, while achieving our lowest emissions intensity on record. For IEMA, measuring emissions is not the finish line. It is the foundation for better decisions, stronger governance and more targeted emissions reduction.

The same principles that IEMA helps clients to apply to their carbon accounting and decarbonisation initiatives are also applied internally to IEMA, ensuring our business continually improves the quality, accuracy and usefulness of our emissions data.

Looking Ahead: Building IEMA’s ESG Framework for Long-Term Sustainability Success

IEMA’s ESG Committee continues to evolve as the business grows. A key focus for FY2027 is developing a formal ESG Framework that establishes clear objectives, responsibilities and performance measures, providing a roadmap for continuous improvement and supporting transparent reporting on IEMA’s ESG performance.

For IEMA, ESG is not a standalone program. It is part of how we operate, make decisions and contribute to positive outcomes for our people, clients, communities and the environment. The ESG Committee helps turn that commitment into action.

An effective Erosion and Sediment Control Plan (ESCP) is not just a desktop design exercise. The best ESCPs combine mapping, catchment interpretation, field verification, project team input and progressive review so erosion controls, sediment controls, runoff management and drainage treatments perform under real site conditions.

“The key lesson from our experience is that an ESCP only becomes truly effective when the desktop design is tested against real site conditions. Mapping tells us where problems may occur; walking the site shows us where the real risks are.”

— Maddie Stojcevski, Senior Consultant, IEMA

In environmental management, mine site rehabilitation, civil construction and land development, some of the most important lessons are not found in drawings, reports, aerial imagery or desktop assessments. They are found by walking the ground, observing how water actually moves across a site and testing whether erosion and sediment controls can be constructed, maintained and relied upon during rainfall.

Desktop ESCP design is essential, but it is only the starting point

That has certainly been our experience when developing and implementing ESCPs. A plan can be technically sound, professionally prepared and based on the best available mapping, contours, drainage lines, catchment boundaries and construction staging information, yet still miss the small site features that determine whether it will perform when the rain arrives.

The simple reality is that runoff does not read drawings. It follows the landform, slope breaks, wheel ruts, depressions, compacted tracks, disturbed soils and preferential flow paths that exist on site. For erosion and sediment control practitioners, this is the difference between a plan that satisfies an obligation and a plan that functions as a practical environmental management tool.

What field verification reveals that desktop assessment can miss

During erosion and sediment control site inspections, we have encountered features that are either invisible, simplified or easily underestimated during desktop ESCP design, including:

• Redundant fire trails that intercept and redirect overland flow
• Wheel ruts and informal vehicle tracks that concentrate runoff
• Animal trails that create small but persistent drainage pathways
• Minor depressions, low points and ponding areas that are not obvious on broad-scale contours
• Hidden drainage paths through vegetation, stockpiles, access tracks or disturbed ground
• Legacy earthworks that have altered ground levels, compaction and surface drainage behaviour

Individually, these features can look minor. In practice, they can be the difference between a sediment fence, diversion drain, check dam, sediment basin or stabilised access point that works and one that is quickly overwhelmed by concentrated runoff.

A wheel rut can become a preferential flow path. A shallow depression can concentrate runoff. An animal trail can redirect water around a sediment control structure that appeared perfectly positioned on the plan. A small site drainage feature can change the performance of an entire control sequence if it is not identified before installation.

Why site inspections improve ESCP performance

This is why ESCP field verification is so important. It gives environmental consultants, construction managers, site supervisors and contractors the chance to test assumptions, identify erosion and sediment risks that mapping alone cannot show, and speak directly with the people who will build, inspect and maintain the controls.

In our experience, the most useful question is not simply whether the ESCP is compliant, technically correct or aligned with a guideline. It is this:

“Can this plan actually be built, maintained and perform as intended under real site conditions?”

That question brings constructability, maintenance, rainfall response, soil disturbance, slope management and site drainage into the discussion early. It also helps avoid common ESCP implementation issues such as controls being installed in the wrong location, controls being bypassed by runoff, maintenance access being overlooked or erosion protection being delayed until after ground disturbance has already occurred.

Common failure sequence when site-specific drainage risks are missed

When site-specific erosion and sediment control risks are missed, the sequence is often familiar:

An unidentified flow path creates unexpected runoff. A diversion drain, sediment fence or other control becomes overloaded or bypassed. Sediment is mobilised. Turbid water moves into drainage lines or downstream receiving environments. The response shifts from planned erosion and sediment control management to reactive maintenance after rainfall.

By then, the opportunity to prevent the issue may already have passed.

Desktop planning remains essential. It provides the baseline data, catchment interpretation, risk assessment and design framework needed to develop effective erosion controls and sediment controls. But for complex construction sites, mine sites, infrastructure projects and rehabilitation areas, desktop planning should be treated as the starting point, not the finishing point.

Five elements of a stronger Erosion and Sediment Control Plan

The strongest ESCPs we have worked with tend to combine five practical elements:

• Desktop assessment to understand catchments, slopes, soil exposure, drainage lines and likely construction disturbance.
• Field verification to verify controls highlighted during desktop assessment and test how the plan can be implemented under real site conditions.
• Construction team engagement to test whether erosion and sediment controls can be built, accessed and maintained safely.
• Understanding actual drainage behaviour so controls respond to observed flow paths rather than assumed flow paths.
• Progressive review to ensure controls change as site conditions do, ensuring up to date management practices.

Together, these steps turn an ESCP from a compliance document into a practical management tool, one that reflects how water is likely to behave once works begin and one that supports better environmental outcomes, reduced sediment loss, clearer responsibilities and more efficient maintenance after rainfall.

One experience has stayed with us

While working alongside a civil construction contractor on a mine site, we made a habit of physically inspecting each proposed work area before finalising the erosion and sediment controls. It was not a box-ticking exercise. It was a practical conversation about how the site would actually behave once machinery moved in, ground was disturbed and rainfall interacted with the changed surface.

We walked the site, discussed constructability, traced flow paths, challenged assumptions and refined designs together. Those conversations often changed the location, configuration or sequencing of controls, not because the desktop plan was wrong, but because the field inspection revealed more precise information.

In several instances, what appeared to be a minor track, shallow rut or subtle low point became an important drainage consideration. By identifying those features before installation, the project team could adjust controls before rainfall tested the system. The resulting plans were more practical, easier to maintain and more effective in managing erosion and sediment risks.

The lesson was clear, and it continues to shape how we approach ESCP development, site-based environmental management and construction-phase erosion and sediment control:

Desktop assessments identify potential problems. Site inspections reveal real ones. Good planning sets the direction, but practical implementation determines the outcome.

Frequently asked questions about ESCP field verification

What is ESCP field verification? ESCP field verification is the process of checking an Erosion and Sediment Control Plan against the actual site conditions before or during implementation. It confirms drainage behaviour, constructability, control locations, access requirements and maintenance needs.

Why is field verification important for erosion and sediment control? Field verification is important because small site features such as ruts, depressions, informal tracks, animal trails and legacy earthworks can influence runoff and sediment movement. These features may not be obvious in desktop mapping but can affect how controls perform during rainfall.

When should an ESCP be reviewed? An ESCP should be reviewed before construction starts, after major site changes, following significant rainfall, when controls are damaged or ineffective, and whenever new drainage pathways or erosion risks become apparent.

Who should be involved in ESCP implementation? Effective ESCP implementation usually involves environmental professionals, engineers, site supervisors, civil contractors and maintenance crews. Involving the construction team early helps ensure controls are practical, buildable and maintainable.

For anyone involved in developing or implementing Erosion and Sediment Control Plans, our advice is simple: do the desktop ESCP work but make time to walk the ground. The field will almost always tell you something the map cannot. For construction projects, mine sites, rehabilitation works and land development activities, that site-based insight can be the difference between a plan that simply exists and a plan that genuinely protects soil, water quality and downstream environments.

Mine closure projects can spend years building the technical foundations for closure. Studies are completed. Designs are developed. Approvals are progressed. Closure criteria are refined. Cost estimates evolve. Risks are assessed.

All of that work is essential.

But there comes a point in the life of a closure project where having more technical information is no longer the main challenge. The challenge becomes bringing it all together and turning it into an executable project.

“Closure projects reach a point where the biggest opportunity is no longer in another individual technical study, it’s in bringing all the workstreams together and understanding how they interact. Through this process we uncovered a significant number of interdependencies, opportunities for collaboration and ways to improve sequencing, reduce duplication and potentially save significant cost. Just as importantly, we mapped the critical points for internal and external stakeholder engagement so those conversations can happen at the right time. This is where closure planning starts to become a genuinely integrated delivery program.”

— Andrew Hutton, Technical Director, IEMA

We recently facilitated a multi-day closure planning workshop for a major mining operation that has reached exactly this stage. The project is transitioning from a collection of individual technical workstreams toward coordinated implementation of the remaining closure works.

In our experience, this is one of the most important transition points in the closure lifecycle.

Closure is inherently multidisciplinary. Environmental specialists, engineers, operations personnel, project managers, rehabilitation practitioners, approvals specialists and site teams can all be progressing important pieces of work. Individually, those pieces may make perfect sense. The risk is that they don’t necessarily make sense as a single implementation program.

A really important part of this workshop was therefore bringing all of the different workstream teams together and having them actively participate in the process.

Rather than closure planning being undertaken by a small central team and then communicated back to the various disciplines, the people responsible for developing, managing and ultimately delivering the individual workstreams were part of the conversation.

That made a significant difference.

Each workstream sees the project from a slightly different perspective and holds different knowledge about constraints, opportunities, timing and delivery. Putting those teams together creates the opportunity to test the interfaces between their work in real time.

And one of the strongest outcomes from the workshop was just how many interdependencies became visible once we started looking at the project collectively.

A decision in one workstream could influence the timing, cost or delivery approach of another. Infrastructure needed to remain operational until other activities were complete. Access, water management, approvals, rehabilitation, demolition, engineering and operational requirements all interacted in different ways.

That reinforced an important point:

Closure cannot be successfully delivered through individual workstreams operating in isolation.

It requires genuine collaboration.

More importantly, identifying those interdependencies wasn’t simply about managing risk.

It also highlighted opportunities.

Once the workstreams could see how their programs interacted, we were able to identify areas where activities could potentially be coordinated differently, where enabling works could unlock other parts of the program, where duplication might be avoided and where sequencing could be improved.

Those conversations have the potential to deliver better closure outcomes while also reducing cost.

That is one of the areas where integrated planning can add significant value. The opportunity is not necessarily about doing less. It is often about doing things in a smarter order, combining activities where appropriate and making decisions with visibility of the whole project rather than one workstream at a time.

Our approach starts before anyone enters the workshop room.

The objective is not to spend valuable workshop time rediscovering information that already exists. Participants should arrive with a common baseline understanding so the discussion can concentrate on the things that actually require collective judgement: testing assumptions, resolving interfaces, identifying gaps, challenging sequencing and making decisions.

Plans, drawings and reports provide one perspective. Standing together in the area being discussed, looking at the physical constraints and talking through how the work might actually be delivered provides another. Combining those perspectives can change the conversation significantly.

Another important part of the process was looking beyond the physical closure works themselves. We also mapped the key milestones for internal and external stakeholder engagement against the emerging closure program.

Closure decisions do not happen in isolation from the people affected by them.

There are points in the program where internal leadership, operational teams, regulators, landowners, community representatives and other stakeholders may need to be informed, consulted or involved in decision-making.

Identifying those milestones early helps ensure engagement is proactive rather than reactive and, importantly, that stakeholder requirements are considered as part of the implementation pathway rather than added later.

Importantly, the goal of this process is not simply to produce another closure document.

The real value is creating alignment around questions such as:

• What actually remains to be done?
• What needs to happen first?
• What is dependent on something else?
• Where can workstreams collaborate?
• What can potentially start earlier?
• Where are the key uncertainties?
• Where are there opportunities to improve outcomes or reduce cost?
• When do key internal and external stakeholders need to be engaged?
• Who owns the next action?
• And what decisions are required to keep the project moving?

Those questions sound simple, but on large and complex closure projects the answers can sit across multiple disciplines, documents, teams and years of project history.

A well-structured planning process creates a point where that knowledge can be consolidated, challenged and converted into a shared implementation pathway.

It also creates something equally important: ownership.

Closure plans are much more likely to move into successful execution when the people responsible for delivering the work have participated in shaping the pathway rather than simply receiving a finished plan.

Bringing all of the workstream teams together also helps create a shared understanding that closure is not owned by one person, one department or one technical discipline. It is a whole-of-project delivery challenge. That is particularly important as a project moves closer to execution.

At this stage, decisions around interfaces, enabling works, sequencing, stakeholder engagement and ownership can have significant implications for schedule, cost, risk and ultimately the ability to achieve the agreed closure outcomes.

Finding an issue during planning creates options. Finding the same issue once contractors are mobilised and physical works have commenced can create cost and delay.

The same applies to opportunities. Identifying collaboration opportunities early can allow projects to optimise sequencing, coordinate work packages, avoid duplication and potentially achieve better outcomes for less expenditure. There is also an opportunity at this stage to challenge the assumption that everything must wait for one large closure campaign.

When the complete program is visible, opportunities can emerge for progressive works, early enabling projects or activities that can be brought forward while other parts of the closure program continue to mature.

Done well, this type of workshop is therefore much more than a workshop.

It is a bridge between closure strategy and closure delivery.

The technical studies remain critical, but eventually a closure project needs to move beyond asking, “What is the technical solution?”

It needs to start asking:

“How are we actually going to deliver this — together?”

That transition is where integration, collaboration, facilitation and practical implementation experience can add enormous value. And for many closure projects, getting that transition right can be just as important as getting the technical studies right in the first place.

Chris Cooper, Principal Consultant – Mine Closure and Transition

The release of the draft Macquarie Coal Complex and Mt Arthur Coal Mine Transformation Precinct Master Plans and state-led rezoning proposals are a significant milestone for the Hunter.

“The release of these draft master plans is a major step forward because it begins to turn post-mining land use from policy ambition into an investable planning pathway. The key challenge now is ensuring the mining lease relinquishment and residual risk frameworks evolve alongside the planning system. Without that parallel reform, rezoning alone will not unlock the full jobs, investment and regional transition potential of these sites.”

There are examples of miner-led post mining development proposals, including the Yancoal led Stratford Pumped Hydro and Solar project on the closed Stratford Coal Mine in Gloucester valley. This is another exciting milestone, approved in the same week as the release of the draft pilot master plans. However, these plans represent broader strategic planning for the Hunter’s mined lands transitioning to a decarbonised economy move beyond broad policy discussion and into a publicly exhibited planning framework that starts to show investors, local government and industry what a real transition pathway could look like. That matters, not just because of the scale of the opportunity these pilot sites present, but because it begins to shift post-mining land use from aspiration to implementable planning.

These plans are ambitious for good reason. They position Macquarie Coal and Mt Arthur as future employment precincts that can leverage scale, existing infrastructure, strong regional freight connections and proximity to skilled workforces to support new industry, logistics, advanced manufacturing, renewable energy and other employment-generating uses.

Just as importantly, this is driven through state-led rezoning processes and draft master plans that start to provide the sort of spatial and policy certainty investors have been waiting for. That signalling really matters. Former mine land is rarely constrained by a lack of ideas. More often, it is constrained by uncertainty, uncertainty about zoning, about what development pathway applies, about whether future uses are genuinely contemplated by government, and about whether technical site constraints will be managed in a way that makes investment realistic rather than speculative.

A master planned, state-led rezoning pathway begins to reduce that uncertainty. It tells the market that this is not just land awaiting closure; it is land being actively positioned for a next use. It is a signal to the market that the Hunter is serious about land transition, and that government is prepared to use planning tools to bring structure, sequencing and visibility to the process.

In practice, that means better signalling of where early activation may be possible, how development can be staged, what further investigations may be needed, and how post-mining land might transition from coal production to productive new uses.

But this planning milestone will not be mistaken for a complete transition solution.

The (arguably) harder parallel task remains the one that sits outside the rezoning package: how NSW deals with mining lease relinquishment, residual mining hazard management and the transfer of ongoing responsibility once post-mining development becomes real. The draft planning framework is a major step forward in opening a pathway for rezoning, master planning and future development consent. What it does not yet resolve, and what it openly acknowledges will require further reform work, is the interface with the Mining Act and the mechanisms needed to make land transactions genuinely workable.

That is the next frontier.

For many sites, the central issue will not be whether a future use can be imagined or even master planned. It will be whether land can be released from mining tenure with enough certainty around residual risk, rehabilitation interfaces and ongoing management obligations to allow a transaction to occur. Investors can price risk. What they struggle with is uncertainty about who ultimately carries it, how long obligations persist, and whether a parcel can be transacted without the former mining operator remaining exposed to open-ended liability.

This is where NSW still needs to do the heavy lifting. If the state wants these pilot projects to become repeatable models, it will need workable mechanisms for the transfer or retention of residual risk, whether through a government-managed framework, successor security or bonding arrangements, residual risk payment models, consent-linked obligations on a developer, or a hybrid of these tools. The exact model can be debated. The need for one cannot.

That is why the Hunter’s pilot project milestone is worth celebrating, but also worth reading carefully. The real progress here is not only the land use vision. It shows the NSW government intent to deliver planning pathways that will meet the economic transition challenge in the Hunter. A key outstanding task to deliver the jobs and investment we need is to make sure the mining title, relinquishment and residual risk frameworks evolve in parallel.

If that happens, Macquarie Coal and Mt Arthur will be more than successful pilots and will deliver a genuine template for how NSW mining regions can turn former mine land into future industry, investment and jobs.

Mine closure costs have a habit of arriving late in the conversation.

They are often discussed late, challenged late and corrected late. By the time the true cost of closure is properly understood, the mine plan, asset valuation, rehabilitation strategy, accounting provision and public commitments may already have been built around a number that was too narrow, too optimistic or prepared for a different purpose altogether.

At the centre of the issue is a common misunderstanding: the assumption that a Rehabilitation Cost Estimate (RCE) is the same as an internal closure cost estimate.

It is not – in fact, they are fundamentally different tools.

“Too often, the Rehabilitation Cost Estimate is treated as the mine’s closure cost. It is not. An RCE is typically a regulatory bond estimate. The internal provision must be a properly scoped, study-aligned estimate built from a detailed WBS and supported by a clear Basis of Estimate. If closure costs are material to the business, they need to be estimated, reviewed and governed with the same discipline as the rest of the project. Otherwise, we risk mistaking a compliance number for the real cost of responsible closure.”

The RCE is typically a bond estimate

A Rehabilitation Cost Estimate is typically prepared to support a rehabilitation bond, security deposit or financial assurance requirement.

Its primary purpose is regulatory.

The RCE is generally intended to estimate the cost that may be required for a regulator or government to step in and complete rehabilitation works if the operator defaults. It is often prepared using regulator-prescribed methods, standardised assumptions, default rates, template structures and defined rehabilitation domains.

For that purpose, it has value.

But that does not make it a complete internal closure estimate.

An RCE is not usually designed to reflect the company’s preferred closure strategy, commercial execution model, accounting provision, life-of-mine planning assumptions or full residual liability position.

It may not fully capture the way the company actually intends to close the asset.

It may not reflect internal delivery efficiencies, staging, procurement strategy, owner’s costs, indirect costs, post-closure risk management or the full range of closure obligations that sit outside the bond calculation.

Yet we still coming across site accountants and managers who rely on the RCE as the internal closure estimate.

It simply is not.

An RCE is typically a regulatory bond estimate.

An internal closure estimate is a business, accounting, planning and governance estimate.

They may inform each other, but they should never be treated as interchangeable.

Why the distinction matters

Using an RCE as the internal closure cost estimate can materially understate the true closure liability.

That has consequences across the business. It can affect asset valuation, life-of-mine planning, Ore Reserve economics, accounting provisions, transaction due diligence, capital allocation, board reporting, investor confidence and closure readiness.

A bond estimate is usually designed around a regulator’s security framework.

An internal estimate should be designed around the company’s actual closure obligation.

Those are not the same question.

The RCE asks, in effect:

What amount of security should be held to protect the regulator and the community if the operator defaults?

The internal estimate should ask:

What will it actually cost us to close this asset responsibly, safely, lawfully and in accordance with our commitments?

Those two questions can produce very different answers.

A proper internal provision needs structure

An internal closure provision should not be a copied RCE, a high-level benchmark or a single line item in a financial model.

It should be assessed against a detailed Work Breakdown Structure, or WBS, that reflects the actual scope of closure.

That WBS should break closure into logical, auditable and costable packages, including planning, approvals and studies; progressive rehabilitation; final landform construction; demolition and decommissioning; asset recovery and salvage; hazardous materials and waste management; contamination assessment and remediation; water management and treatment; mine sealing and geotechnical controls; infrastructure removal; access tracks, drainage and erosion controls; monitoring and maintenance; stakeholder engagement and reporting; owner’s costs, project management and indirect costs; and contingency, escalation and residual risk allowances.

The estimate should also be supported by a clear Basis of Estimate.

That Basis of Estimate should explain what the estimate is based on, what is included, what is excluded, what assumptions have been made, what quantities and rates have been used, what level of engineering definition supports the estimate, what risks remain unresolved, and what level of accuracy is being claimed.

Without a WBS and a Basis of Estimate, it is very difficult for management, auditors, boards or investors to understand whether the provision is complete, reasonable or aligned with the actual closure obligation.

The estimate must mature with the study

Closure cost estimates should mature as the project matures.

A conceptual closure strategy should not carry the same estimating confidence as a detailed closure execution plan. Equally, a feasibility-level mine plan should not rely on a closure estimate that remains at a broad benchmarking level.

As projects move from concept, pre-feasibility, feasibility, operations, late-life planning and execution, the closure estimate should also move through increasing levels of definition.

That means improving scope definition, domain-based quantities, demolition and decommissioning assumptions, rehabilitation methods, material balances, water management and water treatment assumptions, contamination liabilities, mine sealing and residual geotechnical risks, final landform drainage performance, long-term monitoring and maintenance requirements, post-closure obligations, contractor rates, productivity and indirect costs, owner’s costs, contingency and escalation assumptions.

The estimate should be continually reviewed and updated so that its level of accuracy matches the relevant study protocol.

A PFS-level closure estimate should have the scope definition, contingency, risk allowance and accuracy range expected for a PFS.

An FS-level closure estimate should have the engineering definition, quantity confidence, procurement assumptions, schedule logic and cost accuracy expected for an FS.

Closure should not sit outside the study process.

It should be estimated with the same discipline as the mining, processing, infrastructure and sustaining capital components of the project.

The level of estimate should be clear. The confidence range should be clear. The exclusions should be clear.

A single closure number without context is not enough.

JORC is lifting the bar

Closure costs are also becoming more important in public reporting.

The JORC Code is built around the principles of transparency, materiality and competence. Where closure costs, environmental obligations, rehabilitation commitments or post-mining liabilities are material to the economics of a project, they need to be properly considered and transparently explained.

That matters because closure is no longer a peripheral issue.

Closure can materially affect Ore Reserve economics, project value, residual liability, financing and transaction due diligence, social licence, regulatory approval pathways, board confidence and investor confidence.

If closure assumptions are material to the economics of a project, they need to be capable of being defended.

Why closure costs are so often underestimated

In practice, closure costs are often underestimated because the early estimate is too narrow, too generic or based on the wrong estimating framework.

The issue is not always the unit rate.

Often, the issue is the scope.

Common omissions include demolition and decommissioning complexity, hazardous materials and waste classification, contaminated land investigation and remediation, water treatment beyond mining, long-term monitoring and maintenance, mine sealing and subsidence risks, final landform drainage performance, approvals, consultation and specialist studies, indirect costs, owner’s costs and contractor margins, schedule risk and escalation, and residual risks that remain after rehabilitation is complete.

A low closure estimate can look attractive in the short term.

But it can distort asset value, understate liabilities, misinform investment decisions and leave management teams with a funding gap later in the mine life.

A robust closure provision helps boards, executives, technical teams and investors understand the real cost of responsible closure and the value of making better closure decisions earlier.

Closure is not just an environmental obligation.

It is a material business issue.

And an RCE should never be mistaken for the full internal cost of closure.