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GAO-12-189R 1 (2011-12-12)

handle is hein.gao/gaobacfof0001 and id is 1 raw text is: i ~GAO Accouna1bOinty ,Integrity * Reliabtiit United States Government Accountability Office Washington, DC 20548 December 12, 2011 The Honorable Doug Lamborn Chairman The Honorable Rush Holt Ranking Member Subcommittee on Energy and Mineral Resources Committee on Natural Resources House of Representatives Subject: Hardrock Mining: BLM Needs to Revise Its Systems for Assessing the Adequacy of Financial Assurances In a July 2011 testimony before your subcommittee, we summarized the key findings of our prior work on hardrock mining, including the adequacy of financial assurances.1 At this hearing, we stated that the Department of the Interior's Bureau of Land Management (BLM) had taken actions to strengthen its processes, but the financial assurances that it had in place, when we last reported on this issue in 2008, were inadequate to cover estimated reclamation costs from hardrock mining operations, and the agency's Bond Review Fiscal Report (Bond Review Report) inaccurately calculated this shortfall. At the July 2011 hearing, the BLM witness testifying for the department stated that the agency had corrected these issues in response to the concerns we identified in the past. As a result, you asked us to update our prior work assessing the hardrock mining financial assurances held by BLM and determine (1) the value and adequacy of financial assurances that operators use to guarantee reclamation costs for hardrock mining operations on BLM land and (2) the status of BLM's efforts to address issues we previously identified regarding the Bond Review Report and supporting documentation used to determine the adequacy of hardrock mining financial assurances. To determine the value and adequacy of financial assurances for hardrock mining operations on BLM land, we obtained financial assurance data from BLM's Bond Review Report, which aggregates data from BLM's LR2000 database and includes data on bonds covering a single operation, as well as bonds covering all of an operator's mining operations within one state (known as statewide bonds) or all of its mining operations in the United States (known as nationwide bonds). Because LR2000 data is updated daily, we took steps to ensure that we only analyzed data on mining operations that had progressed past the preliminary stages of BLM's mine approval process by collecting data from LR2000 on those operations where the bond amount had been estimated, determined, or accepted as of December 1, 2010, or earlier. We chose December 1, 2010, as a cutoff date in consultation 1GAO, Abandoned Mines: Information on the Number of Hardrock Mines, Cost of Cleanup, and Value of FinancialAssurances, GAO-1 1-834T (Washington, D.C.: July 14, 2011). GAO-12-189R Hardrock Mining Financial Assurances

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