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Mining Act regulations to be fully enforced April 1, 2013
The jury is still out on the new Mining Act regulations in Ontario that require prospectors and exploration companies to consult with First Nations and apply for plans and permits prior to carrying out most exploration activities.
The new rules have triggered a chorus of grumbling and stoked fears of major delays, excessive demands by First Nations and the flight of exploration dollars to other jurisdictions, but Ross Gallinger, executive director of the Prospectors and Developers Association of Canada, claims they provide “certainty in terms of the steps required and transparency for stakeholders.
“Some people are going to look at this permitting as a bit of a delay, but thinking through the process, the amount of certainty outweighs the potential delay,” he said.
“The duty to consult has already been part of the process and, from a best practice perspective, the PDAC has always been an advocate of early and often consultation as a means to facilitate access.”
The new rules, which took effect November 1, will be fully enforced beginning April 1, 2013. Prospectors and exploration companies will still be able to stake claims without notifying First Nations or surface rights owners.
They will also be able to access their claims for hand sampling. However, anything more than that, such as line cutting, will require the prospector or exploration company to submit a plan to the Ministry.
Once a plan is submitted, there will be a 30-day waiting period before the work can be done. First Nations can respond with objections or concerns, and the plan may be approved with conditions. However, if the objections are of a more serious nature, the application can be escalated to a permitting process. Permits will be required for more intensive work using larger, mechanized equipment and can take up to 50 days to be approved.
A Ministry of Northern Development and Mines policy paper on consultation with First Nation communities urges exploration companies to “engage…beyond the minimum processes required pursuant to the Mining Act,” stating such consultations “will lead to more effective and timely results later.”
It goes on to say that “building relationships and goodwill may lead to mutual commitments and arrangements and provide the certainty and stability for a project that permitting processes alone cannot achieve.”
The Ministry will identify the First Nation communities whose traditional territories are potentially affected by an exploration program.
It will also provide direction on the scope of consultations, “assess assertions made about rights and the scope of accommodation required,” and “assess the sufficiency of consultation and accommodations, where required.”
Exploration companies, on the other hand, will be expected to provide First Nation communities with further details about their proposed exploration activities and take their concerns into consideration.
First Nations are expected to participate in consultations and “not frustrate reasonable, good faith efforts to consult,” or “take unreasonable positions… in an attempt to prevent projects from proceeding.”
According to the MNDM policy paper, “aboriginal peoples expect to have the opportunity to share in the economic benefits of natural resource development in their traditional land use areas – whether through employment opportunities, training and capacity development, or revenue streams where those exist.”
The Ministry will circulate submitted exploration plans and permits to affected First Nations, which will, in turn, have three weeks to communicate “any adverse impacts to their aboriginal or treaty rights.”
MNDM will consider any concerns received, and then dialog with the aboriginal communities and claim holder to address them “if appropriate.”
If necessary, the Ministry “will utilize available tools to stop the clock on the permit approval process to facilitate further consultation or dispute resolution.”
Before approving an exploration permit, “MNDM must be satisfied that consultation with Aboriginal communities has been appropriate and reasonable.”
Exploration companies are strongly advised to keep detailed records of their efforts to consult with First Nation communities, including the project information provided, the dates and mode of communication, who they spoke or met with and the responses received.
“Where good faith efforts have been made to consult and a community fails to provide comment with respect to any adverse impacts from an activity on their treaty or aboriginal rights, MNDM will make a decision based on its existing understanding of the rights and interests that may be impacted by a proposed treaty.”
The Ministry advises claim holders that they should be prepared to reimburse First Nation communities for consultation-related expenses, including the procurement of “technical or other advice” depending on the complexity of the project.
These contributions “should be reasonable, relevant and proportional to the scope of consultation” and will be eligible expenses for assessment credit under the Mining Act.
Formal arrangements between claim holders and First Nations are not expected to go beyond information sharing for early stage exploration activities such as hand sampling, geophysical surveys or backpack drilling.
Arrangements made at later, more intensive stages of exploration are expected to include “a financial component related to consultation and mitigation and may extend to employment, training and business opportunities, but should “be proportional to the nature, scale and duration of the project…and not place an excessive burden on the proponent or undermine its feasibility.”
The Ministry policy paper specifically advises against “commitments to pay fees or monies purely by way of access or application to a community,” or “for payments per drill hole or per metre drilled (unless this is used as a means to otherwise quantify contributions to capacity and mitigation…).” Failure to reach agreement will trigger a dispute resolution process.
According to the PDAC’s Gallinger, there is nothing new about the need to consult with and accommodate First Nations.
Most mining and exploration companies have been able to come to agreements with affected First Nations, “so I don’t see (the amended Mining Act and regulations) as being any different than what has already existed.
“We as well as other stakeholders have been involved in the review through the Mines Minister’s Advisory Committee, so we’ve been able to comment on what the government has been thinking and have had the opportunity to respond.
Some of the things in there are the desires of other stakeholders, so are we 100 per cent happy with the outcome? No, but we’re happy with what’s there and we’ll work with the government to resolve some of the other questions that we might have moving forward.”
Gallinger doesn’t see an exodus of exploration companies from Ontario to other jurisdictions as a result of the new regulations.
“First of all, people go where there’s good geology. As long as that geological potential exists, I don’t see this as a barrier. I don’t see this making Ontario any less competitive than anywhere else.”
Not everyone agrees, chief among them being Darryl Stretch, president of Solid Gold Resources, who was to speak at the Ontario Prospectors Association annual geological symposium in Sudbury, November 7.
Stretch claims “the regulations result in a total transfer of all natural resources to the control of hostile, third-party governments. “Canadians,” he added, “must do everything possible to stop this illconceived, race-based initiative.”
Solid Gold acquired rights to a 200-square kilometre property on the North Branch of the Porcupine Destor Fault bordering Lake Abitibi in northeastern Ontario between 2007 and the summer of 2010. The following spring, the company conducted a drilling campaign and reported an intersection averaging 20.7 g/t gold over 1.4 metres in May 2011.
The company avoided meeting with the nearby Wagoshig First Nation until November 2011, when Stretch attended a meeting “billed as a friendly get to know your neighbour kind of meeting” initiated by the Ministry of Northern Development and Mines.
“From the start,” according to a company press release, “the Wagoshig First Nation demanded that all exploration stop until Sold Gold conducted a $100,000 archeological survey to the satisfaction of the (First Nation).
When Solid Gold advised that it had no budget for such a survey, the chief of Wagoshig First Nation threatened litigation and stormed out of the meeting.
“We are not archeologists, lawyers, native historians or constitutional scholars,” continued the company release. “We are prospectors and shareholders who have invested in Ontario and have been denied the right to access mineral claims located on Crown land for which Solid Gold has been granted mineral rights and paid millions of dollars to maintain in good standing.”
The chief made good on his threat and on January 3rd of 2012, the Ontario Supreme Court ordered the company to stop all mineral exploration for 120 days and to enter into meaningful consultations with Wagoshig First Nation.
Solid Gold went back to court on February 11th seeking leave to appeal, which was finally granted this past September.
The appeal, which Solid Gold counsel Neil Smitheman of Fasken Matineau hopes will be heard sometime in January, may hinge on the fact that at the time of the hearing on the injunction in December 2011, the downloading of the duty to consult was not yet enshrined in the Mining Act or its regulations.
Legal counsel for Solid Gold and Wagoshig First Nation have continued to meet, but have not been able to come to any agreement on accommodation.
The amended Mining Act and new regulations, argued Smitheman, will cause delays, raise First Nation expectations and trigger a flood of legal challenges.
“I expect the Crown thinks this will satisfy the First Nations,” he said. “I’m not so sure it does because the First Nations may want to challenge the legislation, saying it doesn’t go far enough.”
Smitheman acknowledge that there have been numerous impact benefit agreements and exploration agreements entered into, “but it seems that the ante keeps on going up and it’s becoming more and more difficult for exploration companies to raise the requisite funding.”
Demanding $5,000 a drill hole is way out of proportion to the impact of a two-inch hole on Aboriginal hunting and fishing rights, said Smitheman.
“There isn’t going to be much money left for exploration if you have to start paying exorbitant amounts of money to simply enter upon traditional territory – Crown land. Uncertainty is not good for any market and it’s no different for mining. The more uncertainty you have, the less your ability to raise funds.
“If we’re dealing with a situation where a First Nation wants no development and industry wants development, that’s an impasse, but I think there are a lot of grey areas where First Nations want to ensure they can continue with their traditional way of life and at the same time allow for development. “We have to go back to basics and find a solution that’s going to benefit everyone because it’s no benefit to those First Nations who want to see some prosperity if nothing is going to be done because the funding won’t be available. That helps no one,” said Smitheman.
Wagoshig First Nation chief David Babin could not be reached for comment, but the First Nation community is known to have successfully negotiated agreements with other mining companies.
Rick Bartolucci, Ontario’s Minister of Northern Development and Mines, shares the PDAC’s optimism. “Ontario wants to ensure its mining industry remains strong and that the rights and interests of aboriginal groups and private landowners are properly addressed throughout the mining sequence,” he said.
“Engaging with aboriginal communities is key. That’s why we’ve made aboriginal capacity-building a significant part of our modernization initiative and have been working hard to carry out workshops and training sessions in aboriginal communities to increase awareness of exploration and mining methods and what the Mining Act amendments entail. We’re also supporting aboriginal mineral advisory positions in communities, tribal councils and other aboriginal organizations that are expected to receive a high volume of exploration plans and permits.
“Ontario’s aim is to ensure that aboriginal communities and industry have the tools they need to work together to ensure mineral exploration and development activities are carried out responsibly across this province.
“Our government is proud of this legislation and the important steps it has taken to balance the interests of the mineral industry, aboriginal communities and private landowners. Through our modernized Mining Act, we will see Ontario communities benefit and our mining industry thrive for decades to come.”
In 2011, investment in mineral exploration in Ontario surpassed $1 billion for the first time.