Navigating asset transitions for a sustainable and equitable future

Australia has robust environmental standards for asset closure, requiring thorough land assessments and remediation to achieve safe, stable and non-polluting conditions. In many cases, carbon and biodiversity offsetting is employed as part of the transition. However, there is room for improvement in integrating economic, social, and intergenerational equity into these transitions.

Traditionally, land reuse options – like reforesting, turning land into grazing areas, or creating water reserves – can take 20 to 30 years to achieve. These approaches often fail to generate the economic activity needed to replace the jobs lost when a major asset like a mine closes. The result can be “ghost towns” where there are few opportunities for those left behind.

In some regions, traditional landowners and key stakeholders are often left out of asset closure and transition planning. Without strong laws or company values pushing for positive social outcomes, companies may bypass engaging with these groups. This kind of oversight risks undermining the cultural and social fabric of the community and overlooks the opportunity to co-create more inclusive and sustainable solutions that are respectful of cultural heritage.

The UN Sustainable Development Goals (SDGs) offer a great guide in our exploration of sustainable asset transition plans. The mining sector can boost its current contributions to advancing SDGs such as providing employment and stimulating economic growth (SDG8) and building resilient infrastructure (SDG9). These efforts can be supplemented through innovative and inclusive asset transition solutions that achieve SDGs such as ensuring access to clean and affordable energy (SDG7) and aiding the development of sustainable communities (SDG11).

Based on a 2020 study on effective mine rehabilitation in Australia, 50 per cent of Australia’s mines are expected to close over the next 25 years. There is ample opportunity to repurpose these sites for significant economic, social and environmental value that benefits asset owners, regions and local communities.

The NSW Government conducted a state inquiry on land use for post-mine closures, gathering responses from invested parties including regulators, mining and energy companies, environmental groups and private landowners. The submissions to the inquiry identified the top five productive and beneficial post-mining land uses, which include:

1. Renewable energy projects
2. Water storage and management
3. Agriculture and land rehabilitation
4. Tourism and recreational lakes
5. Biodiversity conservation

CRC TiME’s post-mining land uses report (2022) presents successful case studies of mining asset transitions that exemplify sustainable repurposing approaches. One example is the Kidston Gold Mine in Queensland. It closed in 2001 and has been repurposed as the Kidston Clean Energy Hub to generate solar and pumped hydro energy. It has delivered a 50MW solar PV facility connected to Australia’s National Electricity Market, and there are plans to expand it to another 250MW solar project. The two existing mine pits are also being developed into the Kidston Pumped Storage Hydro Project with the potential to support 2,000MWh of continuous power generation in a single generation cycle.

Land capability or suitability assessment is a critical step in determining the future of sites planning transition. In Australia, the process involves more than just deciding what to do with the land. It’s about navigating complex zoning constraints, environmental considerations, and community, business and socio-economic needs to find the best possible future use. Commercial viability and appetite are required to see these land uses become a reality.

Another key factor to consider is the financial viability of either retaining ownership or selling the land. The land rehabilitation process required to make a site suitable for a new purpose can be costly. Most companies will naturally lean towards options that offer the highest returns with the most cost-efficient rehabilitation and least long-term liabilities. This financial bias can sometimes limit the scope of creative or community-focussed land reuse projects.

Asset transition also offers the opportunity to embrace the principles of a circular economy. Companies can repurpose materials from existing property, plant and equipment for new developments on the land, reducing waste and potentially lowering costs. Taking this approach works towards achieving the SDGs while also adding in a layer of innovation to the asset transition process.

For asset transition to leave a better, more inclusive legacy, we need to involve all stakeholders and create economic opportunities that align with the community’s needs, values and aspirations. It means thinking beyond short-term outcomes and working collaboratively towards solutions that offer long-term benefits for generations now and into the future.

State governments and local councils play a significant role in shaping the outcomes of asset transitions. They have the power to influence regional planning, making sure considerations like housing affordability, transport and job creation are factored into the decision-making process for potential land uses. When communities express strong support for a sustainable and equitable transition, local governments can be instrumental in driving the necessary changes, improving planning, establishing legislation and enforcing compliance to achieve these goals.

While we need government bodies and asset owners to lay the groundwork for positive asset transitions, it’s just as important to bring in people with big, bold ideas. Innovators from the private sector, local businesses, academia, or the community can offer fresh perspectives and creative solutions, making sure the transition is both sustainable and forward-thinking.

According to GHD’s recent CROSSROADS report, more than 70 per cent of citizens in all surveyed countries agree that governments should do more to grow community understanding about the importance of clean energy and the associated infrastructure required to make it happen. In Australia, 64 per cent of those surveyed believe the switch to clean energy will open new industries and jobs for their communities. The substantial support for clean energy underscores the need for governments and the energy industry to invest in and advocate for sustainable energy solutions as part of their asset transition plans.

Achieving the transition from an operational mine to a land use that provides opportunity for economic, social and environmental value – and benefits asset owners, regions and local communities – requires a new way of thinking. It requires understanding the technical and physical constraints of the mine asset and complementary opportunities for the local community and economic region.

So, what should you do if you’re on the cusp of an asset transition? Start planning now. Engage with local communities, businesses and governments early and often. Look beyond traditional land reuse options and explore innovative approaches that align with both economic and environmental goals. Asset transition is an opportunity to do right by the environment, the economy, and the community.