Assessing environmental liabilities of mining in Northern Australia: A Case study of the McArthur River Mine

Abstract

Mining projects supposedly offer enormous economic benefits; however, they often involve serious environmental liabilities that extend far beyond the life of the mine, including perturbing the ecological balance and causing the loss of ecosystem services that are vital for sustaining human well-being. Understanding and assessing the environmental liabilities of mining is crucial for estimating the costs of restoring, replacing, or providing the equivalent of the damaged natural resources. This study estimates the market and non-market values of the mining impacts in the Northern Territory, Australia, particularly for the McArthur River Mine. We assess these costs by applying the Replacement Cost, Welfare Costs Savings, and Basic Value Transfer methods in terms of the loss of local Indigenous communities' well-being, loss of ecosystem services from native vegetation and freshwater, and the opportunity cost of the mine site none of which are not fully accounted for in the mining operator's environmental assessments and mitigation measures approved by the local governmental authorities. Our valuation analysis indicates that the market value of the environmental and social impacts of mining ascends to AUD 1.1 billion per year while the non-market value is AUD 20 million per year. Assessing mining-related environmental liabilities offers crucial insights for informed decision-making regarding mitigation and remediation efforts and strengthening environmental and mining legislation in the Northern Territory. In conclusion, our study contributes to developing a comprehensive understanding of the true economic impact of mining activities on ecosystems and local Indigenous communities.