GUIDE TO FINANCIAL ASSURANCE FOR MINE CLOSURE IN ARGENTINA

This guide, published by the International Institute for Sustainable Development (IISD) in August 2021, provides a framework for establishing financial assurance for mine closure in Argentina. It aims to ensure that funds are available for environmental rehabilitation and physical stability if a mining company is unable to execute its closure plan. The document details best practices for calculating closure costs, selecting financial instruments, and managing these guarantees throughout a mine's life cycle, drawing on regional examples from Chile and Peru.

• Argentina currently lacks a national law specifically for mine closure financial assurance, although some provincial regulations exist, such as Resolution 396/16 in Catamarca and Resolution 037/2020 in Jujuy.
• Financial assurance is intended to protect the state from inheriting costs if a company becomes insolvent or abandons a site, and it serves as an incentive for companies to perform "progressive closure" activities during operations to reduce the required guarantee amount.
• The guide recommends a phased approach to posting financial assurance: 10% of total closure costs before construction, 20% before production, and a gradual increase to 100% within the first two-thirds of the mine's life (if 20 years or less) or within 15 years of starting operations.
• Closure cost estimates must include direct costs (e.g., demolition, water treatment, reforestation) and indirect costs (e.g., consultants, health and safety plans), as well as the cost of hiring a third party to execute the work.
• The guide identifies several eligible financial instruments for Argentina, categorized by liquidity: 'Readily Realizable' (unilateral on-demand guarantees, pledge of balances on deposit, surety insurance), 'Moderately Realizable' (guarantee trusts, security deposits), and 'Realizable with Restrictions' (pledging of assets and mortgages).
• To avoid unsustainable financial burdens on small-scale miners (those extracting less than 5,000 tonnes per month), the guide suggests exempting them from individual assurance requirements and instead considering collective guarantees, similar to Malaysia's "common reclamation fund."
• The guide emphasizes that the level of engineering design directly impacts the precision of cost estimates and the required contingency percentages; for example, conceptual engineering may require contingencies over 30% to 100%, while detailed engineering requires 10% to 15%.
• For mines with long-term obligations, such as water treatment for acid rock drainage or dam maintenance, financial assurance must include the present net value of costs calculated in perpetuity, using appropriate discount rates.
• The document suggests that Argentina adopt a centralized system for reviewing and managing financial assurance to avoid the inconsistencies seen in provincial-level systems in Canada and Australia, potentially using a model similar to the Canadian Council of Ministers of the Environment (CCME).

APA

International Institute for Sustainable Development (2021). GUIDE TO FINANCIAL ASSURANCE FOR MINE CLOSURE IN ARGENTINA. https://www.iisd.org/system/files/2021-09/financially-assured-mine-closure-argentina-en.pdf

Chicago

International Institute for Sustainable Development. GUIDE TO FINANCIAL ASSURANCE FOR MINE CLOSURE IN ARGENTINA. 2021. https://www.iisd.org/system/files/2021-09/financially-assured-mine-closure-argentina-en.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=GUIDE TO FINANCIAL ASSURANCE FOR MINE CLOSURE IN ARGENTINA |date=August 2021 |url=https://www.iisd.org/system/files/2021-09/financially-assured-mine-closure-argentina-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2021guide, author = {{International Institute for Sustainable Development}}, title = {{GUIDE TO FINANCIAL ASSURANCE FOR MINE CLOSURE IN ARGENTINA}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = aug, url = {https://www.iisd.org/system/files/2021-09/financially-assured-mine-closure-argentina-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }