Deswik Mine Closure Risk Ratio
The Mine Closure Risk Ratio (MCRR) is proposed as a simple method of measuring Life of Mine risks related to mine closure. MCRR is a decision support metric used to integrate mine production and closure considerations when evaluating all business plan scenarios.
By applying a “Maturity Model” to key risk drivers, planners can use MCRR as a strategic risk overlay that can be used with other project decision metrics to produce risk-weighted trade-offs. MCRR clearly illustrates the strategic risk trajectory for selected business plans and highlights opportunities to minimize exposures.
Investors, boards, executives and operations can use MCRR to:
- Make informed, risk-weighted asset strategy decisions (buy / hold / drill / develop / operate / divest / close).
- Provide assurance around strategic risk mitigation and ethical investment outcomes.
- Balance and trade-off operating cashflow vs balance sheet liability.
- Devise a concurrent reclamation strategy that has the greatest impact on closure liability.
- Monitor ‘closure runway’ i.e., time until expected cashflow from the deposit is exceeded by closure costs.
- Manage the risk of unplanned closure and / or unplanned erosion of asset value.
- Set risk trigger levels and key performance indicators to enforce consideration of closure impacts in operational decisions.