MELBOURNE, Aug 25 (Reuters) - Heavy rain in Australia's northern state of Queensland has threatened to spill a tailings dam into the Murray Darling Basin, a key irrigation channel for the country's farmers.
Government officials have arranged for emergency pumping at the tailings ponds of the Texas Silver Mine, which was abandoned last year amid slumping silver prices in the wake of China's slowing economy. Tailings are the waste materials including heavy metal residue and toxic chemicals left over from the mining process.
The Murray Darling Basin accounts for around 20 percent of Australia's agricultural land area, produces one-third of its food supply and is a major exporter. Farmers in the Basin account for some 35 to 40 percent of the gross value of the nation's agricultural production.
The region surrounding the mine has been hit by heavy rainfall since Monday, lifting water towards flood levels. Staff and contractors are on site managing pumping systems to minimise chance of an overspill, Queensland's Department of Environment and Heritage Protection (EHP) said on Thursday.
"I want to stress that this (Texas Silver) is a problem EHP inherited," minister Steven Miles said in a statement.
"The department is working towards long-term remediation, but that is not possible within the current FA (financial assurance). It demonstrates why it is so important to ensure financial assurance calculations are accurate - otherwise taxpayers can be left with the shortfall."
The Queensland government has A$2 million ($1.5 million) in financial assurance from the site's previous owners, a department spokesman told Reuters. The state currently holds A$5.92 billion as bond for the state's mine remediation.
Full Texas Silver site rehabilitation could cost Australian tax payers much as A$10 million, according to a government document cited by state broadcaster ABC.
Texas Silver Mines Pty Ltd entered liquidation on 25 July 2015. The Queensland government took control the following month. It was most recently operated by Alcyone Resources which went into receivership in late 2014.
State governments have come under increasing pressure to take larger deposits from miners to rehabilitate their sites in the event they go out of business.
Queensland, Australia's biggest coal producer, could face a A$3.2 billion shortfall in funding to rehabilitate coal mines when they close. biggest mining state, Western Australia, has already been left with a A$60 million clean-up bill after more than 70 projects suspended operations despite getting a $1 billion lifeline in 2013. ($1 = 1.3098 Australian dollars)