DMR lifts moratorium on insurance guarantees

South African mining houses will be breathing a sigh of relief now that the Department of Mineral Resources (DMR) has lifted the moratorium on the acceptance of insurance guarantees for mining rehabilitation.

In May 2009 the DMR ruled that insurance guarantees for mining rehabilitation would no longer be accepted; leaving mines having to pay the money upfront or provide bank guarantees. Since then, intense consultation has taken place between all stakeholders – including the department, insurers, the Financial Services Board (FSB) and the South African Insurance Association. This culminated in the DMR’s lifting of the moratorium at the end of January.

“Essentially the status quo remains unchanged from what it was before the moratorium was imposed, except that the department has now specified only a limited few short-term insurance providers from which guarantees for liabilities relating to environmental rehabilitation will be accepted,” says Herman Schoeman, MD of Guardrisk.

The insurance providers that the registrar of the FSB has identified as “competent underwriters” of guarantees for rehabilitation purposes are: Guardrisk Insurance Company Limited; Centriq Insurance Company Limited; Lombard Insurance Company Limited; Santam Limited; Zurich Insurance Company South Africa Limited; and SGI Guarantee Acceptances (Pty) Ltd.