Financial Provisioning Scheme for resource activity environmental authorities

From 1 April 2019, financial assurance requirements for resource activities under the Environmental Protection Act 1994 were replaced with the Financial Provisioning Scheme (FPS) under the Mineral and Energy Resources (Financial Provisioning) Act 2018 (MERFP).

The MERFP Act applies to small scale mining tenure holders and all resource activity environmental authority holders.

If you hold a resource activity environmental authority (EA), you will need to know about the estimated rehabilitation cost (ERC) for an EA to understand how the FPS applies to you.

Small scale mining tenure holders and environmental authorities with ERC less than $100,000

You are required to provide surety (financial assurance) equal to the value of the estimated rehabilitation cost for your permit or authority. There is no risk assessment for small scale mining tenures or environmental authorities with an ERC less than $100,000.

If there is an increase in your surety (or it is a new tenure) the FPS will send you an invoice equal to the increase in ERC with:

the amount of surety required
a due date for payment of the surety
bank details for the electronic payment of cash surety (if you are providing cash)
information on how to lodge non-cash surety.

If there is a decrease in the ERC or your EA is successfully surrendered, the FPS will contact you to organise any return of surety.

For information on providing surety, read the following:

Environmental authorities with ERC more than $100,000 and less than the prescribed ERC of $10 million

EAs with an ERC of more than $100,000 and less than $10 million may still elect to be risk assessed if you meet the following criteria:

For EAs with an ERC between $100,000 and less than $10 million and with a risk category other than High, you can elect to remain in the risk assessment process.
For new or acquired EAs, and the new EA holder has another EA with a risk category other than High, you can elect to have your new EA participate in the risk assessment process.

For EAs with an ERC between $100,000 and less than $10 million and with a risk category allocation of High, or where you have opted out of the risk assessment process, you will be required to provide surety equal to 100% of the ERC value. For EAs with a current risk category allocation of High, surety will likely be in place already. These EAs will not be required to participate in the annual review risk assessment process and therefore you will not have to pay the annual assessment fee going forward.

Environmental authorities with ERC more than the prescribed ERC of $10 million

The EA will be required to undertake a risk category allocation assessment process annually.

Based on the risk category allocation, you will be required to pay either a contribution to the financial provisioning fund or to provide surety.

We will send you, as the holder or 'relevant holder' (where there are multiple holders), a letter about the assessment and a request for information.

Information on the assessment process:

Find out how the Scheme Manager assigns the relevant holder in the Guideline 2: Assigning an authority to a relevant holder (PDF, 996KB).

Following the risk category allocation assessment, we will send you an invoice including:

the amount of the contribution, assessment fee and/or the amount of surety required
a due date for payment
bank details for you to make electronic cash payments
information on how to lodge non-cash surety.

Transfers

A small scale tenure permit or an EA may be transferred to a new holder as a result of an asset sale with the tenures being sold to a new entity or shares in a company holding the tenures/EA being sold. Read about the FPS processes for a transfer in Information sheet 4: Environmental authority transfer processes (PDF, 406KB).

Fees

If you hold an EA with an ERC of $100,000 or more and you are in the risk assessment process, you will be charged an annual assessment fee as set out below and prescribed in the Mineral and Energy Resources (Financial Provisioning) Regulation 2019.

At least $100,000 and less than $1 million		$250
At least $1 million and less than $10 million		$1,250
At least $10 million and less than $50 million		$5,000
At least $50 million and less than $100 million	comprehensive assessment streamlined assessment	$22,500 $11,250
$100 million and over	comprehensive assessment streamlined assessment	$45,000 $22,500

A comprehensive assessment is an allocation decision for an authority that involves consideration of the characteristics of a resource project to which the authority relates.

A streamlined assessment is an allocation decision for an authority that does not involve consideration of the characteristics of a resource project to which the authority relates.

Mandated notification forms

The Act requires holders to notify the Scheme Manager in certain circumstances. The circumstances and relevant notification form to use are below.

Form FPS1 (DOCX, 858KB) – this form is to be completed by a holder, who has been allocated to a risk category and applies under s33 of the MERFP Act to the scheme manager for a proposed changed holder review allocation.
Form FPS2 (DOCX, 858KB) – this form is to be completed by a holder who has been allocated to a risk category, to give notice to the scheme manager under s42 of the MERFP Act that there has been a direct/indirect change of holder for an authority.
Form FPS3 (DOCX, 857KB) – this form is to be completed by a holder to give notice to the scheme manager under s43 of the MERFP Act that production in relation to an authority has ceased.

Contact

For more information about the Financial Provisioning Scheme, phone (07) 3035 3551 or email FPS@treasury.qld.gov.au.

More information

Read about the reforms to improve rehabilitation and financial assurance outcomes in the resources sector.