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.