Over time, miner’s reliance on natural capital could increase credit risks
Reclamation obligations could top the mining industry's debt obligations by 2033, a new report by Moody's Ratings warned.According to the financial services firm, the costs for asset retirement obligations for the 24 largest mining companies reached $72 billion at the end of the fiscal year 2023, the equivalent of around 42% of the industry's outstanding long-term debt.Total reclamation obligations, including current provisions, reached $78 billion at the end of 2023.
The American gold miner expects to spend around $600 million in 2024 and $700 million in 2025 on reclamation, which is more than double what the company spent in 2022 and 2023.At the end of 2023, Rio Tinto had the largest reclamation provision, followed by BHP, Newmont, Glencore and Vale.The increase in reclamation costs is mainly due to growing land disturbance, evolving regulations, cost inflation, and greater societal focus, Moody's said.
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