High Cost of Poor Closure Planning

Troy Dunow, Director of Mining & Metals

21 April 2021 making the difference

Introduction

Troy Dunow is the Director for Mining & Metals in

Canada and the Global Lead for Mine Closure.

He holds a Bachelor of Science in Civil Engineering

and Construction Management from Boise State
Troy Dunow
University and a Master of Business Administration
Director
Natural Resources from University of Phoenix.

He has over 25 years of construction experience and

has been with Turner & Townsend for nearly 10 years.

Troy has been married for 26 years and is a proud

father of five children.

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Successfully delivering closure and decommissioning programs
requires a strategic and collaborative approach, a focus on the mine site
itself, the expectations of the surrounding communities, socio-economic
considerations, regulatory requirements, and strong commercial skills.

Turner & Townsend

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Mine Closure Survey

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Creating revenue generating opportunities

Community infrastructure

85%
Site

Regulation Community
of survey respondents agreed
mine closure can permanently
and positively transform
community infrastructure

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Mine closure scenarios
Site is fully closed and reclaimed
Opportunities
■ Returned to natural state
■ Available for recreational use
Challenges
■ Loss of employment opportunities
■ No long lasting benefits to communities
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Location and community favors revenue generation
Opportunities
■ Ongoing employment opportunities
■ Social and economic benefits (water, buildings, landfills)
Challenges
■ Continued impact to environment
■ Meeting needs and expectations
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What we see in closure cost and schedule planning

Escalating closure costs, far How often is adequate

capital set aside for effective
above initial estimates closure?

Inability to contract work for

expected costs

92%
Delayed closure program
execution

Risk - dissatisfied stakeholders

and damage to license to operate of survey respondents reported
inadequate capital is set aside for
closure.
Potential for claims and disputes

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What is needed to determine the cost and schedule of mine closure?

■ The overall scope of decommissioning, demolition and

reclamation

■ Regulatory and stakeholder requirements

■ Timelines to perform the closure activities and on-going

environmental monitoring

■ Project management approach

■ Availability of construction resources, supply chain and

execution planning

■ Opportunities for implementing new technologies e.g.

water treatment

■ Risk – political (regulatory), economic, social,

technological, environmental

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Estimating challenges facing today’s mine closure teams

What is needed is a greater understanding of what Cost and schedule

drives the variance between actual costs on mine benchmarks
closure project completion, and the original budget
estimate, and a robust methodology that uses tools,
processes and data.

40%
Providing the most accurate estimate possible
requires:
■ Efficient estimating system
■ Cost data
■ Benchmark data of survey respondents reported
their organisation does not have
■ Knowledgeable estimators the right benchmarks to provide
■ An appreciation of how costs will change over time confidence for future mine closure

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The high cost of poor planning

Failure to properly plan and execute the mine closure may have a
significant impact to the mining company. Some of these impacts
are:
• License to operate (inability to continue operations)
• Less capital for development or expansions
• Claims & disputes (contractors, community, regulator)
• Delayed revenue opportunities in re-purposed sites
• Increased bonding requirements
• Reputational damage
• Inability to meet the “green” agenda

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 Be realistic and not optimistic about closure planning

Learn from others

Take a risk based approach

Maintain the closure estimate

Take a progressive reclamation approach

Keep up to date on regulations

Maintain relationships with the regulator

and community
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High Cost of Poor Closure Planning

Troy Dunow, Director of Mining & Metals

21 April 2021
making the difference