THREE mining companies owed the Government penalties to the tune of US$13.7 million (approximately $2.2 billion) at the end of 2025 after they failed to rehabilitate 264.14 hectares of mined-out land as required by law.

At the same time, the March 2026 Schedule of the Mines and Geology Division (MGD) of the Ministry of Agriculture and Fisheries identified US$828,000 in royalty principal and US$2.58 million in interest and penalties outstanding from two operators.

These are among the key findings of a performance audit by the Auditor General’s Department (AGD) dated July 2026, of the licensing, monitoring and enforcement actions of the MGD.

The audit report was tabled in the House of Representatives on Tuesday.

Auditor General Pamela Monroe Ellis noted in her overview that the MGD is responsible for regulating the sector under the Mining Act of 1947 and the Quarries Control Act 1984, to ensure that mining and quarrying operations are properly authorised, monitored, and enforced in keeping with the law and the public interest.

The audit found that one lessee accounted for 169.68 hectares (64 per cent of the area not rehabilitated) and US$9.89 million (72 per cent of the total monetary exposure).

“The weaknesses in enforcement were linked to the absence of a single, auditable, rehabilitation register; non-use of the security deposit mechanism during the review period, and the absence of finalised rehabilitation guidelines for quarries.

“Consequently, MGD could not demonstrate that all lease renewals were supported by the required information, reducing assurance that operators had the financial capacity to meet their obligations, and that Government had adequate protection, through the security deposit, against future rehabilitation or restoration costs,” said Monroe Ellis.

She added, “The long-outstanding rehabilitation obligations remained unresolved, and MGD could not demonstrate that the polluter-pays principle embedded in Sections 53A–55 of the Mining Regulations was being effectively enforced.”

MONROE ELLIS…MGD could not demonstrate that the polluter-pays principle embedded in Sections 53A–55 of the Mining Regulations was being effectively enforced

Monroe Ellis said the audit assessed whether MGD’s licensing, monitoring, and enforcement arrangements were effective in supporting orderly and compliant mining and quarrying operations for the period 2019-2020 to 2023-2024.

“In particular, the audit examined whether applications were properly assessed before approval, inspection activities were adequately planned and targeted, breaches were followed up in a timely and consistent manner, and whether MGD maintained reliable records to support regulatory decisions,” she explained.

Among the other key findings was that one operator continued mining for six years after its licence had expired, in breach of Sections 25 and 31 of the Mining Act and Section 8 of the Quarries Control Act.

Monroe Ellis also found that six quarry operators continued operations after their quarry licences had expired. Five of them submitted renewal applications between 30 and approximately 607 days after expiry, while one submitted no renewal application.

“MGD also did not consistently issue reminder notices before licences ended, or take timely enforcement action after expiry. Continued operation beyond the authorised licence period weakened the licensing regime; reduced the deterrent effect of enforcement; and increased risks related to revenue collection, environmental oversight, and public confidence in the regulatory system,” said Monroe Ellis.

She also pointed out that mining leases were renewed without key documents, and the resulting risk materialised in unenforced rehabilitation obligations.

The auditor general explained that the Mining Act, and the Mining Regulations, require that lease renewals be supported by current financial statements, evidence of public notice to allow objections, and security deposits or letters of guarantee sufficient to protect the Government against rehabilitation or restoration costs.

“The regulations also require mined-out lands to be rehabilitated within the prescribed time frame; with statutory tools such as security deposits, restoration bonds, and penalty assessments to be used to enforce rehabilitation obligations.”

According to the audit, of the eight active operators reviewed, only four submitted up to date financial statements, two submitted none, and two submitted outdated statements.

Mining operation in progress.

“Further, there was evidence of public notice being issued for only four of the eight leases. In addition, four of the operators that were non-bauxite entities did not provide the required security deposits.”

Monroe Ellis said MGD advised that the security deposit requirement had been relaxed to promote investment but did not provide documented approval for this concession.

The audit also found that quarry inspections were not guided by a documented risk-based approach.

Said Monroe Ellis: “Good practice for regulatory oversight requires that inspection activities be guided by a documented, risk-based methodology. MGD’s own operational plans and the Quarries Control Act envisage inspection frequency and priorities being determined by risk factors such as size of operation, environmental sensitivity, compliance history and complaints, with inspection targets assigned and monitored.”

Yet, MGD did not have a documented method for prioritising quarry inspections, and managed only 243 inspections in fiscal year 2022/23 against a target of 400.

According to the audit, royalty arrears and quarry tax obligations were not systematically tracked.

It said MGD did not maintain accurate records on the status of royalty payments and quarry taxes, and the records were not reconciled in a timely manner.

Alarmingly, the audit also found that enforcement records were incomplete, even while MGD’s standard operating procedures require the maintenance of complete and reliable records of enforcement action, including reported breaches, investigations, referrals, corrective action, and outcomes.

“We could not confirm that enforcement action was consistently pursued for 14 of the 15 illegal quarrying cases recorded in MGD’s complaints register,” said Monroe Ellis. She outlined that nine police reports were reviewed; however, only one matched an entry in the register and showed evidence of follow-up actions.