Mine Financial Security Program

The Government of Alberta and the AER use the Mine Financial Security Program (MFSP) to strike a responsible balance between protecting Albertans from oil sands and coal mine closure costs and maximizing industry opportunities for responsible and sustainable resource development. The MFSP is one of many liability management programs ensuring Alberta’s energy resources are developed responsibly.

The program

  • manages coal and oil sands liabilities by collecting financial security from mine approved holders, and
  • protects the public from paying for project closure costs.

How the MFSP Works

At the end of a mining project’s life, the approval holder of the oil sands mine or coal mine must remove all infrastructure and return the land to how it looked and how it was used (or similarly) before development took place. The MFSP is a series of financial deposits that secures funding to ensure the mine becomes reclamation certified. The financial burden to abandon and reclaim mine sites remains with the mine approval holder.

Under the MFSP, mining approval holders must provide sufficient funds to abandon, remediate, and reclaim their sites. We are responsible for managing the security deposits submitted by mine approval holders. By ensuring these costs are covered, approval holders can afford to remediate and reclaim their sites and maintain the land until they receive a reclamation certificate.

How Security Is Collected

A company’s financial security deposit is based on the estimated liabilities of its mine, which are the costs to abandon, remediate, and reclaim the site. Companies pay the full financial security deposit based on estimated liabilities at the start of the mining project. When the project is close to operating, the approval holder can submit a request to calculate its financial security using the four security deposit types, which focus on potential risks throughout the mine’s life cycle. Alternatively, they can continue to pay full financial security until the mine receives a reclamation certificate.

The four financial security deposit types and their timing are as follows. 

Base Security Deposit (BSD)

The approval holder pays the BSD once the AER allows the approval holder to use the four deposits to calculate their security. The BSD is used to maintain the security and safety of the site until another operator assumes responsibility for the project or until all infrastructure is removed and the site is reclaimed.

Operating Life Deposit (OLD)

The OLD addresses project risks that coincide with the end of a mine’s reserves. An approval holder is required to start posting financial security when there are less than 15 years of reserves remaining. This deposit ensures that all outstanding abandonment, remediation, and surface reclamation costs will be fully secured by the time there are less than six years of reserves remaining.

Asset Safety Factor Deposit (ASFD)

The ASFD addresses the scenario where the approval holder’s MFSP asset value falls below three times the cost of its MFSP liability. The ratio of MFSP assets to MFSP liability is called the asset safety factor (ASF). When a project’s MFSP asset-to-liability ratio falls below 3.0, the approval holder must pay financial security to set its ratio at 3.0.

Outstanding Reclamation Deposit (ORD)

The ORD addresses the risks posed by an approval holder that defers reclamation of its site until the end of operations. The approval holder must post an ORD when it fails to meet its approved reclamation plan targets.

Where to Send MFSP Submissions

Approval holders must submit their MFSP annual submissions (using schedule 2 or 3, provided below) and supporting documentation to MFSPSubmissions@aer.ca.

Supporting MFSP Documents for Industry
 

Guides and Schedules

Governing Documents

Annual Publications

For more information on oil sands mines, see the Oil Sands Information Portal. 

Direct questions and submissions for MFSP to MFSPSubmissions@aer.ca.