State Parliament in Queensland, Australia passed new legislation that will require resource companies to financially contribute to rehabilitate abandoned mines in Queensland.
The new legislation is a change from the site-by-site approach and the money that is contributed will go into a pool of money to rehabilitate future abandoned sites if the owner goes bust, ABC News Australia reported.
If a new mine fails, the funds will be used to cover the cost to rehabilitate the site, removing liability from taxpayers.
Future high-risk projects have to give a surety to the government to cover their rehabilitation costs.
The interest from the billion-dollar fund will be used to make a modest contribution to the overall cost of rehabilitating existing abandoned mines, and toward some research and development.
Deputy Premier Jackie Trad described the new laws as "ground-breaking".
"These reforms strike the right balance for the environment and the resource sector, while ensuring resource companies, not Queensland taxpayers, foot the bill for the rehabilitation of failed mines or stranded assets," Trad said.
"The reforms ensure that mine rehabilitation actually happens in Queensland and we don't leave a legacy of abandoned mines for future generations, or mines that are in care and maintenance for many decades.
It is understood will take up to a decade for the interest to accumulate before it can be used for existing mines.
The bill for current site rehabilitation in Queensland is estimated to run into the billions of dollars, with the state responsible for maintaining about 120 abandoned or legacy mines.
Head of Queensland Resources Council (QRC) Ian Macfarlane said the legislation was not going to be retrospective.
"Those mines operating under the current environmental approvals wouldn't have retrospective conditions apply to them," he said.
Some opponents of the legislation argue that taxpayers will still be left to foot the bill for the mines not covered.
Lock the Gate has accused the Government of being "strong armed" by the mining lobby, but the Government maintains the laws were never going to be retrospective.
The laws would require new mines to pay for areas such as voids and waste ponds to be rehabilitated, but existing mines won't face the same requirements.
All mining companies will now require progressive closure and rehabilitation plans for all projects.