An environmental bond is NOT used to rehabilitate a mine.
A bond is used by the Govt should the mining company fail to rehabilitate the mine in accordance with the rehabilitaion plans submitted to govt. Plans are reviewed on occassions and bond amounts are also reviewed in keeping. It has a life of its own and simply becomes part of the process.
A bond is usually a promise made by the miner's bank to the Govt. It is a written assurance BY THE BANK. The assurance is usually provided as an unconditional, irrevocable and on-demand bank guarantee. Of course, unless special arrangements are made, the miner has likely given the bank the money for the bond.
If you read page 12 of the PLV 2012 annual report it explains " provision of a $20Million bank guarantee to use for statutory environmental bonds for the Cockatoo island project."
Here is a company shipping 2 to 3 loads per month making profits and one or two posters have started a silly childish fuss about the book-keeping and timing issues behind the bond.
PLV is about much more than the bond payment process, although some do not want it to be.
PLV Price at posting:
20.7¢ Sentiment: None Disclosure: Held
