Navigating Operational Complexities and Costs with Integrated Mine Planning

Ernst & Young recently reported that the mining and metals industry in 2026 will face growing operational complexity and rising capital costs, both of which are critical sources of risk. In our experience, one area where this risk is often underestimated is the integration of closure planning into mine operations. In practice, closure planning is typically considered later in the mine lifecycle rather than as an integral part of operational and financial planning.

Without early and integrated mine and closure planning, companies risk inaccurate estimates and unforeseen or underfunded liabilities. These liabilities can include post-closure monitoring and maintenance costs like water treatment, material rehandling across the site to achieve closure outcomes, or even incomplete reporting of financial obligations (Okane, 2025; Dunow & Kalisch, 2022).

Responsible mine development planning involves incorporating true lifecycle costs into financial feasibility studies (Hutchison & Detorre, 2011). Embedding closure considerations into mine planning helps operators more effectively manage what is often seen as a costly liability, integrating closure into both operational and financial decision-making throughout the lifecycle.

In New South Wales (NSW), Australia, the government recently released an updated rehabilitation cost estimation tool to help mining companies calculate costs for site rehabilitation and security deposits more accurately (NSW Government, 2025). Similarly, jurisdictions like British Columbia (BC), Canada, have issued guidance on mine reclamation liability cost estimates to protect and minimize impacts to watercourses and cultural heritage resources (BC Ministry of Energy, Mines, and Low Carbon Innovation (EMLCI), 2024).

For this month’s Conversation on Closure, we take a look at the types of closure cost estimates and spotlight key aspects of NSW’s updated rehabilitation cost estimation tool, as well as BC’s mine reclamation liability cost estimate guidance, to help mine operators integrate multidisciplinary and interdisciplinary planning across their sites and develop more representative closure cost estimates.

Types of Closure Cost Estimates

There are four types of closure cost estimates: life of asset, financial liability, sudden closure, and regulator (financial assurance) (ICMM, 2019). An overview of each closure cost estimate is summarized in the table below (ICMM, 2019):

Life Of Asset (LoA)	Financial Liability, also known as Asset Retirement Obligation (ARO)
LoA cost estimates represent the full expected cost of mine closure, assuming the site will operate for its entire planned life. It should include the costs of planning, rehabilitation, decommissioning, demolition, post-closure monitoring, social and workforce, and relinquishment. LoA cost estimates must also account for uncertainties and risks by applying contingencies, which can be quantified using probabilistic or deterministic methods, to reflect the variability of planned activities and the best-estimated amount needed to address anticipated unknowns.	Financial liability reflects the mine owner’s reporting obligations to publicly provide disclosed estimates of the net present value (NPV) of mine closure and rehabilitation costs of the current disturbed footprint and decommissioning mine domains at the time of reporting. It typically covers essential costing aspects such as rehabilitation earthworks, decommissioning, decontamination, demolition, project management, and post-closure monitoring and maintenance. Due to financial standards, these estimates do not include social impact or workforce costs.
Sudden Closure	Regulator (Financial Assurance)
Sudden closure estimates are often used to support internal planning by assessing business risk response to unforeseen physical, political, social, or economic changes. The estimate typically includes all cost elements of an LoA cost estimate except long-term water management. It essentially represents the cost of closing the mine (whole or part) tomorrow and is calculated using detailed bottom-up first principles for works to be completed by either the operations owner or third-party contractors.	Regulatory closure costs estimates are legally required financial assurances that cover the costs of unplanned or sudden closure. The basis of estimate is calculated at a given specific liability or time, and the included cost elements can vary depending on local regulations. In some jurisdictions, a residual risk closure cost may be required to support future remediation once the mine is relinquished.

Important Considerations for Developing a Closure Cost Estimate

A critical consideration when developing a closure cost estimate is the level of design available to inform the estimate and the basis of estimate. Closure cost estimation requires consideration of capital cost as well as costs for post-closure monitoring and maintenance. The level of design maturity will inform the cost estimate contingency and accuracy range (International Organization for Standardization [ISO], 2021).

NSW’s Rehabilitation Cost Estimation (RCE) Tool

One important update to the NSW RCE Tool is the use of a bottom-up first principles calculation method, estimating rolled-up costs for relatively complex rehabilitation activities from basic unit costs, labour, equipment, and productivity rates (NSW Resources, 2025).

The RCE tool now includes individual input sheets for various mining domains, such as tailings storage and active mine areas, as well as additional reference sheets for information on cost schedule, rates, productivity, and assumptions. These additions will provide further transparency and support detailed rehabilitation cost estimates for more reliable closure planning.

Before calculating an RCE, companies must factor in all the relevant regulatory and site-specific rehabilitation requirements, including approved final land use and conditions, site-specific rehabilitation approaches and management strategies, as well as anticipated risks and complexities that may affect rehabilitation outcomes. The tool provides a total cost estimate suitable for financial assurance but does not support the development of a cash flow-based cost estimate that could be used for financial liability or ARO estimates.

BC Major Mine Reclamation Liability Cost Estimate (RLCE) Guidance

While not a cost estimation tool itself, the RLCE Guidance helps companies calculate closure and reclamation liabilities. The RLCE Guidance requires companies to prepare two distinct cost scenarios over a 100-year assessment period (EMLCI, 2024). The first scenario focuses on short-term liabilities, covering reclamation costs associated with the maximum liability observed over the next five years, while the second scenario estimates the full life-of-mine liability (EMLCI, 2024). Having both scenarios supports immediate and long-term financial planning and helps operators manage potential cost escalations and risks over time.

Another key consideration is the application of a minimum 15% contingency fee to the final RLCE. If a lower contingency is proposed, a justification must be provided in the RLCE and accepted by the Chief Permitting Officer. The required contingency depends on the level of uncertainty (EMLCI, 2024). If uncertainty is higher and additional studies are needed to assess the performance of closure solutions or prescriptions, the Chief Permitting Officer may request a higher contingency fee.

Okane’s Approach

In our experience, we have supported several mine sites around the world with integrated mine and closure planning through closure studies and risk management plans to support various closure cost estimates.

Canada: At a Northwestern gold and silver mine site in British Columbia, Okane was engaged to support a site with the Major Mines Permit Application, and as part of the application, we completed the reclamation and closure plan and the RLCE under the updated Joint Application Information Requirements.
Canada: For a proposed mine site in northern Quebec, Okane applied the RLCE methodology and utilized the Standardized Reclamation Cost Estimator (SRCE) model to develop multiple cost estimates supporting a pre-feasibility study. These estimates enabled us to provide the client with alternative closure cost scenarios based on various mine closure prescriptions. These estimates helped the client identify the most financially viable option and demonstrated that certain closure strategies, such as leaving roads or infrastructure in place, could reduce costs while still delivering long-term benefits to the local community.
Australia: Okane is currently supporting annual closure cost estimates across a group of iron ore mines by delivering a provisional liability assessment that reflects international standards for financial disclosure reporting, helping management with asset review and approval processes.
Greece: Okane is currently transferring a gold mine’s ARO costing sheet to a more robust, transparent, and industry-accepted SRCE model. This transfer supports the client’s regulatory approval process and provides a streamlined approach for efficiently updating future AROs by adding or removing assets over the life of mine.
Türkiye: Okane provided conceptual closure cost estimates for several operational sites to support the operator’s ARO reporting in order to develop a framework for efficient updates and to facilitate the project’s progress toward closure.

At Okane, we align our closure cost estimates with the cost-estimating methodology endorsed by AACE, as well as the ISO-21795 Standards for Mine Closure and Reclamation Planning. AACE helps define different cost estimate classes, including contingency ranges and expected accuracy range after contingency.

Depending on how well defined the project is, it may not be possible to achieve an accuracy range of −10% to +30%, particularly if there are specific risk events anticipated. During cost estimating, a contingency requirement of more than 15% can also indicate that the project is not sufficiently defined to support a −5% to +20% accuracy range. Therefore, when an estimate is predetermined to fall within a certain class, Okane leverages guidelines like the AACE guidance to communicate to the client the expected level of accuracy.

We include cost contingencies in all closure cost estimates to account for execution risks and cost uncertainties. As a closure project and reclamation design mature, the cost estimate’s accuracy range improves correspondingly.

Our team of experts employ various closure cost estimation tools, including standardized cost models such as the SRCE, RECLAIM Model, and industry-recognized guidance for heavy equipment, allowing us to efficiently estimate costs and time associated with equipment usage.

Connect with us at info@okaneconsultants.com to explore how we can help build a representative, site-specific cost estimate tailored to your operational and closure requirements.

References

British Columbia Ministry of Energy, Mines and Low Carbon Innovation (EMLCI). (2024). Major mine reclamation liability cost estimate (RLCE) guidance. https://www2.gov.bc.ca/assets/gov/farming-natural-resources-and-industry/mineral-exploration-mining/documents/reclamation-and-closure/reclamation-security/major_mine_rlce_guidance.pdf

Dunow, T. & Kalisch, B. (2022). The high cost of poor closure estimates. In A.B. Fourie, M. Tibbett, & G. Boggs (eds), Mine Closure 2022: Proceedings of the 15th International Conference on Mine Closure, Australian Centre for Geomechanics, Perth, pp. 1193-1200. https://doi.org/10.36487/ACG_repo/2215_88

Hutchison, I. & Detorre, R. (2011). Statistical and probabilistic closure cost estimating. Tailings and Mine Waste 2011, Vancouver. https://open.library.ubc.ca/media/stream/pdf/59368/1.0107717/1

International Council on Mining & Metals (ICMM). (2019). Mining with principles: Financial concepts for mine closure. https://www.icmm.com/website/publications/pdfs/environmental-stewardship/2019/guidance_financial-concepts-for-mine-closure.pdf

International Organization for Standardization. (2021). Mine closure and reclamation planning part 2: Guidance (ISO 21795-2:2021). ISO. https://www.iso.org/standard/80426.html

New South Wales (NSW) Government. (2025). New rehabilitation cost estimation tool. NSW Government. https://www.resources.nsw.gov.au/news-articles/new-rehabilitation-cost-estimation-tool

NSW Government. (2025). Rehabilitation cost estimation tool user manual. https://www.resources.nsw.gov.au/sites/default/files/2025-10/rehabilitation-cost-estimation-tool-user-manual-october-2025.pdf