Overview of Reclamation Bonds

Reclamation bonds are a type of surety bonds that mining operators and companies engaged in resource extraction often have to post prior to launching their activities. They are required by state and federal authorities to ensure the proper handling of used natural resources for mine reclamation.

Why Do I Need a Bond?

The purpose of reclamation bonds is to guarantee that mining companies will take proper care of the lands and waters that are affected by their extraction activities. After they close their mining operations, they have the responsibility to ensure that the mined locations are safe and can be ‘reclaimed’ by nature.

Thus, reclamation bonds serve as a mechanism to enforce the obligations of mining operators in terms of protecting the ecological integrity of the used lands. They are typically required for obtaining a coal mining permit from the Office of Surface Mining Reclamation and Enforcement, and other state and federal bodies. The bonds guarantee compliance with the Surface Mining Control and Reclamation Act of 1977 (SMCRA) and other relevant laws.

Do you need more information about the bonding process for mining land reclamation? You can consult our detailed ‘What is a surety bond’ guide.

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

In case you have further questions, you can reach our bond experts at 866.450.3412.

How Much Does a Reclamation Bond Cost?

The cost of your reclamation bond is directly linked to the bond amount that the relevant authorities require you to post. This is typically set on a case-by-case basis, depending on the mining project and specifics of the area.

The surety bond cost that you have to pay represents a small percentage of the bond amount. When you apply with a surety provider, it has to look at a number of factors to determine the exact percentage.

Factors That Determine Your Bond Premium

There are specific indicators that typically contribute to the formulation of your bond cost. They include:

  • Personal credit score of the business owners
  • The company’s financial history
  • Experience of the company and the owners in the mining industry
  • Project management track record of the company

These factors are used to measure the likelihood of a company to be able to pay any bond claims if such occur. Applicants with a stable financial profile and a reputable track record can expect to get lower rates. In some cases, collateral may be required along with the premium.

How Do Bond Claims Work?

In case a mining company does not restore the used land or in another way brings about environmental damages to the area, a claim against the bond can be filed. This is how the relevant authorities and landowners can demand fair reimbursement for the incurred costs.

The maximum sum that can be claimed is equal to the penal sum of the bond posted by the mining company. The case is investigated and if proven, the claim has to be paid out. All costs remain a liability for the mining operator. Thus, it is best to stay away from situations that can give rise to such issues.

How to Get a Reclamation Bond

Are you ready to start your bonding process? Complete the form through the banner below to get a free quote.

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

Have more questions about reclamation surety bonds? You can call us at 866.450.3412.

Further Reading

About us:
Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.