Letters of credit (L/Cs) will remain an option for mining companies required to guarantee that they will carry out environmental remediation work associated with their activities.

This is because a senator pushing for legislative changes that would increase financial oversight and protect the environment has abandoned attempts to introduce his bill, which would have disallowed the use of L/Cs for such purposes.

Lengthy debates

Senator Jim Carlson pulled his proposals from consideration, even after quite lengthy debates in a Senate committee.

The senator said he was unsure whether he had sufficient votes for the bill to proceed.

Miners' concerns

Environmental remediation manager for Rio Tinto, Kelly Payne, singled out as a particular concern the move to disallow the use of L/Cs and surety bonds to guarantee that environmental remediation work will be carried out.

Rio Tinto recently posted a US$18 million surety bond on a mine in Michigan to cover remediation work and says it now expects to post similar guarantees in future US projects.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.