Comprehensive mine closure planning is an important facet of maintaining strong relationships with local governments and communities and is a risk management process at Nevsun. Proper mine closure planning helps us to avoid the risks of being exposed to higher costs, missed opportunities, compensation claims and reputational damage. Closure planning starts at exploration and mine design and continues throughout the life of the mine. At present, the estimated mine life for Bisha is approximately 10 years (2025). However, there is flexibility to extend the life of mine through successful continued exploration.
A conceptual mine closure plan prepared by an independent engineering firm and registered with the Eritrean Ministry of Energy and Mines is in place for the Bisha Mine. We ensure the closure plan is reviewed and updated regularly to reflect our evolving areas of operation and expansion.
We base the Bisha Mine closure and reclamation liability on our best estimate of costs for site closure and reclamation activities. A total of $34.2 million had been accrued at December 31, 2014 (December 31, 2013 – $23.6 million) in current estimated closure costs for the Bisha Mine, as disclosed in Note 13 to the audited consolidated financial statements of Nevsun.
Undoubtedly, closure of the mine will result in potential socio-economic impacts for the local population. This includes a positive impact of the local community regaining access to grazing land that has been taken up by the mine site, as well as the negative impact of the loss of employment for local communities. One particular option to help offset this local economic decline is to plant species for dry season grazing as well as planting Acacia Senegal that can be harvested for Gum Arabic, a cash crop that the Ministry of Agriculture is supporting. Our BMSC Training Centre is also improving the skills of our workers that will facilitate their employment opportunities with other mining companies operating in Eritrea.
In 2016, BMSC will further refine its closure planning to help mitigate negative socio-economic impacts of mine closure. A consultant will be hired to develop a conceptual social mine closure plan.