assurance for long-term protection of water quality. Some mines on federal lands have provided such assurances negotiated on a case-by-case basis with state and federal agencies, even where explicit authority to require such assurance may not have been in the regulations.


State laws, regulations, and state and federal guidance documents cover the determination of financial assurance amounts. Financial assurances for reclamation are calculated based not on the operator 's cost to complete the work but on the cost to bring in a third party to complete the work with regulator agency and/or consultant oversight. The regulatory agency determines the costs, often based on information submitted by the operator. The equipment costs are determined based on equipment available for rental in the vicinity of the operation, fuel costs, and operator costs, typically an hourly rate. The equipment 's efficiency at material movement and rate of progression of the work is determined from such resources as the Caterpillar Performance Handbook. Building demolition and disposal is based on standard demolition costs. Seed and revegetation costs are based on actual information available from seed distributors. Knowledge of local labor rates and typical time requirements to complete the work are also used to develop detailed costs for all aspects of the site reclamation.

Most financial assurance language allows for periodic review of the reclamation costs and the bond instruments to ensure that the financial assurance is adequate. Some regulations require that the full amount of financial assurance for the maximum disturbance be submitted prior to construction; others allow the financial assurance to be submitted for the amount to be disturbed at any one time, usually a year, plus the amounts previously disturbed and not successfully reclaimed prior to that time. Almost all financial assurances are for the life of the project, although regulatory language may allow for periodic review and for change to the amount or form of the assurance. For instance, financial assurance forms used in Colorado specify that the bond is for one year, but the bond is automatically renewable for subsequent years if no other bond is put in place prior to the expiration date. That allows the state to review the financial assurance on a yearly basis, but does not require them to do so in order to maintain the appropriate coverage.

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