Submission: Queensland's Financial Provisioning Scheme review

30 September 2026

To: Queensland Department of Natural Resources and Mines, Manufacturing and Regional and Rural Development

Re: Queensland's Financial Provisioning Scheme review

Thank you for the opportunity for the Institute for Energy Economics and Financial Analysis (IEEFA) to provide input to the Financial Provisioning Scheme review.

IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

IEEFA has the following recommendations that relate to both the adequacy of the Scheme's long-term financial viability, and governance and administration matters, brought to light by the recent Bluff coalmine abandonment.

The recommendations include:

1. Financial viability risk
   • Manage the fund as a portfolio, not as a series of individual risks. 
   • Report annually the estimated rehabilitation cost (ERC), Scheme-backed ERC and contributions by sector, including by coal subsector – metallurgical and thermal. 
   • Stress-test and publish the Scheme fund's capacity to absorb concurrent failures of several mining companies across a sector. 
   • Set a sector concentration threshold that reflects the sector life-cycle and, if breached, triggers a review of contribution rates and/or surety requirements. 
   • Consider introducing progressive contribution rates to the Scheme during its build phase to mitigate risk during its accumulation phase. 
2. Improved transparency 
   • The Queensland Government should disclose security deposit holdings by individual entity. The government does not disclose Financial Provisioning Scheme (FPS) contributions or surety holdings for individual responsible entitles. In NSW, where security deposits are held against rehabilitation cost estimates (RCE), the individual values are disclosed, improving transparency and accountability.
   • Reintroduce the mandatory three-yearly audit of PRCPs.
3. Risk Reassessment Trigger Events 
   • An Environmental Authority (EA) holder, or its parent entity, entering insolvency, administration or liquidation should automatically trigger an immediate Scheme risk reassessment and recalculation of surety to the full ERC. 
   • Placing a mine into care and maintenance should be a formal Scheme risk-reassessment trigger. 
   • Elsewhere, the public audited accounts of mining companies may contain audit notation of going concern issues. Similarly, the Scheme manager assessment of an entities increase in risk category (requiring higher levels of surety) should take effect within a maximum six-month notice period when an operator shows going concern issues.
4. Require surety for residual risks
   • Climate change is likely to have a bearing on future estimated rehabilitation costs. Ensure ERC estimates contain adequate contingency for such events. 
   • Require upfront surety requirements to include an allowance for the newly formulated Residual Risk Assessment payments.

Thank you for the opportunity to make this submission. Please do not hesitate to contact me to discuss this submission in further detail.

Kind regards,

Andrew Gorringe, Energy Finance Analyst, Australian Coal

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