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.
The Mineral and Energy Resources (Financial Provisioning) Act 2018 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.
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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 environmental authority is successfully surrendered, the FPS will contact you to organise any return of surety.
For information on providing surety, read the:
- Forms of surety guideline (PDF, 1.6MB)
- Financial institution undertaking (non-cash surety template) (DOCX, 42KB)
- Cash surety deed template (DOCX, 697KB)
- Surety check list (DOCX, 726KB).
A small scale tenure permit or an environmental authority 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/environmental authority being sold. The Financial Provisioning Scheme processes for a transfer are set out in the Environmental authority transfer processes (Information sheet 4) (PDF, 406KB).
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The environmental authority 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.
For information on the assessment process:
- Forming the Scheme Manager's opinion guideline (PDF, 1MB)
- Risk category allocation information sheet (Information sheet 1) (PDF, 1MB)
- Requiring surety to preserve the financial viability of the Scheme Fund (PDF, 970KB)
Find out how the Scheme Manager assigns the relevant holder in the Assigning an authority to a relevant holder guideline (PDF, 995KB).
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.
For information on providing surety, read the:
- Forms of surety guideline (PDF, 1.6MB)
- Financial institution undertaking (non-cash surety template) (DOCX, 42KB)
- Cash surety deed template (DOCX, 697KB)
- Surety check list (DOCX, 726KB).
An environmental authority 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/environmental authority being sold.
The Financial Provisioning Scheme processes for a transfer are set out in the Environmental authority transfer processes (Information sheet 4) (PDF, 406KB).
Fees
If you hold an EA with an ERC of $100,000 or more, 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 $22,500 $100 million and over $45,000
Surety information sheets
- Realising surety provided by multiple holders (Information sheet 2) (PDF, 970KB)
- Financial institution paying out a surety instrument (Information sheet 3) (PDF, 1.1MB)
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, 100KB) – 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, 99KB) – 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, 95KB) – 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.