The South Dakota Board of Minerals and Environment is increasing the bond formula on the company that owns the Homestake Mine.
The move is designed to cover inflation and increased costs should the state be on the hook to clean up the abandoned mine.
Barrick is the company that owns the Homestake mine, which closed in the early 2003. The state Board of Minerals and Environment is bumping up Barrick’s bond from $60 million to $80 million.
In 2006, the board approved a 100-year postclosure period. As part of that, the state reviews the bond formula every five years.
Rex Hagg is chair of the board, which is approving a readjusted bond formula proposed by the state. He said the $20 million jump reflects increased costs.
“That’s why the adjustment is so large this year,” Hagg said. “Is because of what’s been going on with inflation and all that stuff during COVID.”
The bond amount will cover everything from water management and treatment, as well as monitoring and maintenance of the postclosure area and the costs of heavy equipment, in the event Barrick folds.
The $80 million lump sum amount is what the state determines will cover post closure costs for 83 years.
“If everything went south and things weren’t covered, you’d have the bonds in place to make sure things get properly done. It’s part of state law," Hagg said.
Barrick’s bond amount will increase annually though 2027, which is when the formula will get readjusted again.
The postclosure period for the Homestake Mine is scheduled to end in the year 2105.
