Menu
Contact Us Search
Organization Title

Financial Assurances

SMARA requires that each mining operation have a financial assurance to ensure that reclamation is performed in accordance with the approved reclamation plan. Financial assurances must be payable to “lead agency” and the Department of Conservation. If a change of ownership occurs, the existing financial assurance remains in force until a replacement financial assurance is approved by the lead agency.

For private entities, financial assurances must be in the form of surety bond, irrevocable letter of credit, or trust fund (such as an assigned CD). A surety bond must be on the form approved by the State. That form may be downloaded here. For CDs, an Assignment of CD form that may be used is available in the State Mining and Geology Board Guidelines for Financial Assurances.

SMARA requires that the financial assurances be adjusted annually. The adjustments account for new lands disturbed, inflation and for reclamation of lands accomplished in accordance with the approved reclamation plan (PRC 2773.1(a)(3). Thus, the financial assurances are calculated from the state of the mining operation each year – the cost to reclaim should the operation close during that year – not calculated from the final anticipated state of the land at the planned end of mining.

Reclamation plan and financial assurance requirements apply only to operations conducted after January 1, 1976 (PRC 2776).

The Mining Board provides Guidelines for Financial Assurances. The guidelines include a sample form for estimating the cost of reclamation.  

The Office of Mine Reclamation has developed a tool to assist lead agencies and operators prepare a reclamation cost estimate and determine an appropriate amount for the financial assurance in conformance with Section 2773.1 of SMARA. This tool is an MS Excel version of Appendix A-1 of the Financial Assurance Guidelines.  It should be used in conjunction with the Financial Assurance Guidelines adopted by the State Mining and Geology Board.  To access, click here.

 

YOUR DOWNLOADING AND/OR USE OF THE TOOL CONTAINED HEREIN SIGNIFIES THAT YOU HAVE READ AND UNDERSTAND THE FOLLOWING: 

The information provided herein is a tool intended to assist mine operators and lead agencies in the preparation and review, respectively, of certain aspects of cost estimates.  Use of this information does not guarantee the adequacy or accuracy of any proposed cost estimate or constitute full or adequate compliance with any applicable statute, regulation or local ordinance regarding cost estimates.  In addition, the California Department of Conservation does not warrant the accuracy, completeness, or content of any information in this spreadsheet.  Such information is provided "as is" without warranty or condition of any kind, either express or implied, including, without limitation, a warranty as to the suitability of this product or the data contained therein for any particular purpose.  This spreadsheet provides preliminary data and could include inaccuracies, and/or typographical errors and in no event shall the Department of Conservation be liable for direct, indirect or consequential damages resulting from use of the information.  Any questions about the contents of this spreadsheet should be directed to the Department of Conservation, Office of Mine Reclamation at (916) 323-9198.