South Carolina Reclamation Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a South Carolina Reclamation bond.

At a Glance:

• Lowest Cost: 3% of the bond amount per year
• Bond Amount: Determined on a case-by-case basis (more on this later)
• Who Needs it: Businesses seeking to obtain a mine operating permit or exploration certificate in South Carolina
• Purpose: To ensure the public will receive compensation for financial harm if the business fails to return all altered land to its original condition
• Who Regulates Mining Activities in South Carolina: The South Carolina Department of Health and Environmental Control

Background

The South Carolina Mining Act requires all businesses seeking to conduct mining or related exploration activities to obtain a permit or certificate from the Department of Health and Environmental Control. The South Carolina legislature enacted the permitting/certification requirement to ensure that businesses return altered land to its original condition. To provide financial security for the enforcement of the Mining Act, businesses must purchase and maintain a surety bond to be eligible for a permit/certificate.

South Carolina Statute 48-20-110 states that mining companies may purchase either separate bonds or a single blanket bond covering all of their permits/certificates.

What is the Purpose of the South Carolina Reclamation Bond?

South Carolina requires mining companies to purchase a surety bond as part of the application process to obtain an operating permit or exploration certificate. The bond ensures that the state will receive compensation for financial harm if the company fails to abide by the regulations outlined in the South Carolina Statute 48-20-110. Specifically, the bond protects the public if the company fails to return all altered land to its original condition. In short, the bond is a type of insurance that protects the state if the company violates the terms of its permit/certificate.

How Can an Insurance Agent Obtain a South Carolina Reclamation Surety Bond?

BondExchange makes obtaining a South Carolina Reclamation bond easy. Simply login to your account and use our keyword search to find the “Reclamation” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

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How is the Bond Amount Determined?

South Carolina Statute 40-28-110 dictates that the required bond amount for companies applying for a Certificate of Exploration is $2,500. The statute also states that companies applying for an operating permit must purchase a bond with a limit based on the amount of land being disturbed, as outlined below:

Companies disturbing more than 25 acres of land may have their bond limits increased if the Department of Health and Environmental Control deems it necessary.

Is a Credit Check Required for the South Carolina Reclamation Bond?

Surety companies will run a credit check on the owners of the mining company to determine eligibility and pricing for the South Carolina Reclamation bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the South Carolina Reclamation Bond Cost?

South Carolina Reclamation bonds will typically cost anywhere between 3% to 5% of the bond amount per year. Surety companies will determine the rate based on factors such as your customer’s credit score, years of experience, and in some cases, financial statements. Additionally, surety companies may also require your customers to put up collateral when purchasing this bond.

Who is Required to Purchase the South Carolina Reclamation Bond?

South Carolina requires companies seeking to conduct mining activities to purchase a surety bond as a prerequisite to obtaining either an operating permit or exploration certificate. To paraphrase South Carolina Statute 48-20-40, “mining” refers to the process of breaking surface soil or removing overburden to extract ores and minerals that will later be sold.

Exemptions to this definition include:

• The removal of overburden and mining of limited amounts of ores and minerals for the purpose of determining the location and quality of a natural deposit provided that no materials are sold and the affected area is less than 2 acres
• Mineral processing plants (unless specifically involved in the on-site removal of ores and minerals)
• Excavation or grading incidental to on-site farming or construction
• Dredging operations that harvest oysters or clams or remove shells from coastal bottoms

The same statute defines “exploration” as the act of breaking surface soil to determine the location, quantity, or quality of a mineral deposit.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Companies Apply For a Mine Operating Permit in South Carolina?

Mining companies in South Carolina must navigate several steps to obtain a permit. Below are the general guidelines, but applicants should refer to the permitting statute and the South Carolina Department of Health and Environmental Control’s permitting page for details on the process.

Step 1 – Determine the Permit Type

South Carolina requires mining companies to obtain specific permits corresponding to the size and scope of the mining operations being conducted. Below are the different types of the South Carolina Mine Operating Permit:

• • General: Required for mining operations that consist of 5 acres or less. This permit only allows the mining of sand/clay and topsoil and forbids processing from taking place at the operation.
  • Individual: Needed for all mining operations not covered under an exploration certificate or general permit

Step 2 – Contact the Department of Health and Environmental Control

Mining companies should contact the Department of Health and Environmental Control at (803) 898-2000 or [email protected] before applying for a permit. The department will walk them through the application process, provide them with all required forms, and answer any questions they may have.

Step 3 – Create a Reclamation Plan

Applicants for an individual permit must create a reclamation plan prior to submitting their application. The plan must contain information relating to how the company plans to prevent harmful environmental events such as erosion and sedimentation from occurring as a result of the mining activities. Applicants must submit their completed reclamation plans with their permit applications

Step 4 – Complete the Application

All South Carolina Mine Operating Permit applications (click here for general, click here for individual) should be mailed to the following address:

South Carolina Department of Health and Environmental Control
Bureau of Land and Waste Management
Division of Mining and Solid Waste Management
2600 Bull Street Columbia, S.C. 29201

Mining companies must complete the application in its entirety and pay a $600 fee (same for both permit types). Applicants for an individual permit must submit the following additional items with their applications:

• • Reclamation plan
  • Reclamation map
  • Tax map with adjacent landowner information
  • Topographic map
  • Letter from a licensed attorney stating that the land can be mined
  • Land entry agreement (for lands owned or leased)
  • Supplemental application (only required for in-stream dredging of sand)

Step 5 – Attend a Public Hearing (Individual Permit)

Applicants for an individual permit may be required to obtain a public hearing before being issued a permit. After receiving an application, the department will post a notice in the local paper and notify all adjacent landowners, relevant government agencies, and other interested parties of the applicant’s desire to obtain a permit. The department will hold a public hearing on the company’s permit application if 10 or more people request one.

Step 6 – Purchase a Surety Bond

Applicants for a general permit must purchase a $10,000 surety bond. Applicants for an individual permit must purchase a surety bond in an amount based on the number of acres being disturbed (limits outlined above).

How do South Carolina Companies Renew Their Mining Permits?

Companies that hold general permits must mail their completed renewal applications to the following address:

South Carolina Department of Health and Environmental Control
Bureau of Land and Waste Management
Division of Mining and Solid Waste Management
2600 Bull Street Columbia, S.C. 29201

All South Carolina General Mine Operating Permits are valid for one year from the date of issuance. Companies that hold individual permits do not need to renew them, as these permits are active for the duration of the mining operations.

How do South Carolina Mining Companies Apply for an Exploration Certificate?

As with operating permits, mining companies in South Carolina must navigate several steps to obtain an exploration certificate. Below are the general guidelines, but applicants should refer to the certification statute and the South Carolina Department of Health and Environmental Control’s permitting page for details on the process.

Step 1 – Contact the Department of Health and Environmental Control

Mining companies should contact the Department of Health and Environmental Control at (803) 898-2000 or [email protected] before applying for a certificate. The department will walk them through the application process, provide them with all required forms, and answer any questions they may have.

Step 2 – Ensure the Operation Meets the Certification Criteria

South Carolina will only issue exploration certificates for operations that meet the following criteria:

• • Is being conducted solely for the purposes of determining the location of a mineral, the size of a deposit, or the quality of an ore
  • The site does not exceed 2 acres

Companies that plan on conducting an operation in excess of the above criteria must obtain a mine operating permit.

Step 3 – Create a Reclamation Plan

Applicants for an exploration certificate must create a reclamation plan detailing how they plan to ensure that their exploration activities will not adversely affect the surrounding area. Additionally, reclamation plans must describe the cleanup process once the operation is completed. Applicants are required to submit their completed reclamation plan with their certificate application.

Step 4 – Purchase a Surety Bond

Certificate applicants must purchase a $2,500 surety bond.

Step 5 – Complete the Application

All South Carolina Exploration Certificate applications should be mailed to the following address:

South Carolina Department of Health and Environmental Control
Bureau of Land and Waste Management
Division of Mining and Solid Waste Management
2600 Bull Street Columbia, S.C. 29201

Mining companies must complete the application in its entirety and pay a $300 fee.

What are the Insurance Requirements for Mining Companies in South Carolina?

South Carolina does not require mining companies to purchase any form of liability insurance as a prerequisite to obtaining a mine operating permit or exploration certificate. Mining companies must purchase a surety bond (limits outlined above).

How do South Carolina Mining Companies File Their Reclamation Bonds?

Mining companies should submit their completed bond forms, including the power of attorney, to the following address:

South Carolina Department of Health and Environmental Control
Bureau of Land and Waste Management
Division of Mining and Solid Waste Management
2600 Bull Street Columbia, S.C. 29201

The surety bond requires signatures from both the surety company that issues the bond and from a representative of the mining company. The surety company should include the following information on the bond form:

• Legal name and state of incorporation of the entity/individual(s) buying the bond
• Surety company’s name and address
• Bond amount
• Applicant’s permit number
• Date of the bond is signed

What Can South Carolina Mining Companies do to Avoid Claims Made Against Their Reclamation Bonds?

To avoid claims against their bonds, mining companies in South Carolina must ensure that they return all land altered throughout the course of the mining process to its original condition and work to prevent erosion and sedimentation from occurring as a result of their operations.

What Other Insurance Products Can Agents Offer Mining Companies in South Carolina?

Most reputable mining companies will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for South Carolina Mining Company Customers?

South Carolina conveniently provides a list of active mines in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.