Mining company bankruptcy shows need for financial guarantee
The mining company Lappland Goldminers, who were running gold mining projects in Sweden and Finland, went bankrupt in the beginning of April 2014. Sadly, this mining company bankruptcy left a 1500 meter wide open pit mine with serious leakage of metals in Blaiken, Sweden. The cost of decontaminating the site is estimated to 100-200 MSEK (11-22 million Euro) plus a running cost of 1 million SEK (111 000 Euro) per month to prevent further leakage. Since Lappland Goldminers did not have any financial guarantee that cost will be born by the tax payers.
This situation could have been avoided if Lappland Goldminers had set up its own cell within EIS PCC and made sure that there was a financial guarantee in place to cover future decontamination costs – even in the event of a bankruptcy. Legislators are increasingly recognizing the need for such guarantees and have already imposed strict legislation within other industries and countries. However, even if legislation is not there yet or is still to weak, mining companies can be proactive and show their customers and shareholders that they take their future responsibilities seriously by setting up a financial guarantee within EIS PCC.