Mine Financial Security Program

By law, coal and oil sands mine companies are responsible for reclaiming land that is disturbed by mining and the operation of related plants. Standards for reclamation are set by the Government of Alberta.

The fundamental principle of the Mine Financial Security Program (MFSP) is that the Environmental Protection and Enhancement Act Approval holder is responsible for carrying out suspension, abandonment, remediation and surface reclamation work to the standards established by the province and to maintain care-and-custody of the land until a reclamation certificate has been issued. The approval holder must have the financial resources to complete these obligations.

Effective March 29, 2014, the Alberta Energy Regulator (AER) has assumed responsibility for this program, originally established by Alberta Environment Parks (formerly Alberta Environment and Sustainable Resource Development) in 2010.

The Mine Financial Security Program has been developed to take a comprehensive approach to managing liabilities associated with coal and oil sands mine operations. This includes:

  • Quantification of liabilities for all facilities, as well as the assets dedicated to the management of those liabilities;
  • Regular and appropriate reporting and review of that information; and,
  • A requirement to undertake and report ongoing reclamation.

The Mine Financial Security Program takes an asset-to-liability approach to managing financial risks. It recognizes that the resource value associated with an approved project is an asset in terms of the cash flow generated by its operations. The program requires a base amount of security for each project which, among other things, would provide the funds necessary to safely secure the site and place the project in a care and custody state. When a project has MFSP assets at least three times larger than its MFSP liability, is 15 years or more from the end of its reserves and is keeping current with its reclamation plans, additional security above the base amount is not required. When a project has MFSP assets less than three times its MFSP liability, or is nearing the end of the mine productive life, or is not meeting its targeted reclamation plans, additional financial security is required.

Supporting documentation for the Mine Financial Security Program can be accessed on the AER website at:

  • Annual Mine Financial Security Program Submissions
  • Mine Financial Security Program Guide
  • Mine Financial Security Program Standard
  • MFSP Schedules

Type of Financial Security Deposits Under the Mine Financial Security Program

The MSFP includes four types of financial security deposits, focusing on various potential risks in the lifecycle of a mine:

Base Security Deposit (BSD): existing and new projects will be required to provide a base security. Among other things, this security will be used for suspension care and custody to maintain security and safety at the site until a new company takes over or the site is closed. For existing projects, the base security deposit will be the amount of security each project had posted with the government effective December 31, 2010. For new projects, the base security will be as follows:

New Mines
Mine Type

Base Security Deposit (BSD)

Mine-mouth coal mine


Export coal mine


Oil sands mine with no EPEA approval as of January 1, 2011


Oil sands mine and upgrader with no EPEA approval as of January 1, 2011


Operating Life Deposit (OLD) addresses the risks at the end of mine life. A company is required to start posting financial security when there are less than 15 years of reserves left so that all outstanding abandonment, remediation and surface reclamation costs are fully financially secured by the time there are less than six years of reserves left.

Asset Safety Factor Deposit (ASFD) addresses the risks if a company’s cash flow falls below a level deemed adequate to ensure that all MFSP liabilities can be fully funded. The company posts financial security when the MFSP asset to MFSP liability ratio falls below 3.00. Sufficient financial security must be posted to bring the ratio to 3.00.

Outstanding Reclamation Deposit (ORD) addresses the risks posed by a company deferring reclamation. The company posts security when they do not reduce liability according to a reclamation schedule approved by Alberta Environment and Parks.

Approval holders can elect to place full security at any time in the life of the project based on the MFSP liability calculation. In this case, the approval holder would no longer be subject to the four security deposits described above. The entire coal sector has elected to provide full financial security.

Additional information


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Updated: Jan 16, 2018