Canada: New Reporting Obligations Imposed on Mining Companies Under the Dodd-Frank Act

While much has been written about the wide-ranging impact of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act") on financial institutions, mining companies whose securities are publicly traded in the United States will need to consider the implications of three provisions of the Act dealing with new reporting obligations affecting this industry. Two of these provisions are directly applicable to mining companies and mandate disclosure regarding mine safety information and payments to various government entities in connection with the commercial development of oil, natural gas, or minerals. The third provision, which relates to manufacturing companies' use of conflict minerals originating in the Democratic Republic of the Congo and adjoining countries, may indirectly affect mining companies with operations in those countries. As with many aspects of the Act, implementation of these requirements is dependent upon future regulatory rulemaking. Nevertheless, mining executives should start familiarizing themselves now with these new reporting obligations in light of the lead times necessary to implement the policies and procedures to enable compliance with the Act.

Mine Safety Information

Mine operators must include in each periodic report (i.e., quarterly and/or annual reports) filed with the U.S. Securities and Exchange Commission (the "SEC") certain information concerning safety matters relating to the issuer and any subsidiary that operates a mine during the period covered by such report. The information required by Section 1503 of the Act includes:

  • Total number of violations of mandatory health or safety standards that could significantly and substantially contribute to a mine safety or health hazard under the U.S. Federal Mine Safety and Health Act (the "Mine Safety Act") for which the operator received a citation from the U.S. Mine Safety and Health Administration ("MSHA");
  • Total number of orders issued under the Mine Safety Act;
  • Total number of citations and orders for unwarrantable failure of the operator to comply with mandatory health or safety standards under the Mine Safety Act;
  • Total number of flagrant violations under the Mine Safety Act;
  • Total number of imminent danger orders issued under the Mine Safety Act;
  • Total dollar value of proposed assessments from the MSHA; and
  • Total number of mining-related fatalities.

Operators will also need to disclose in their periodic reports a list of mines that have received written notice from the MSHA regarding either a pattern, or the potential to have a pattern, of violations of mandatory health or safety standards of a nature that could have significantly and substantially contributed to mine health and safety hazards under the Mine Safety Act. Finally, operators must disclose any pending legal action before the U.S. Federal Mine Safety and Health Review Commission involving their mines.

As of July 21, 2010, the date of enactment of the Act, public companies who comply with reporting obligations on domestic forms required of U.S. companies under the U.S. Securities Exchange Act are obligated to file a current report with the SEC on Form 8-K whenever they are in receipt of an imminent danger order issued pursuant to the Mine Safety Act or receipt of written notice from the MSHA that the mine has a pattern, or the potential to have a pattern, of violations of mandatory health or safety standards under the Mine Safety Act. The SEC has yet to issue details on the specific disclosure that will be mandated through rulemaking. A review of recent Form 8-K filings reveals that mining companies are complying with this new obligation by utilizing Item 8.01 Other Events to describe the receipt of an order or notice and any action taken to remedy the situation. Given that Section 1503 refers solely to a disclosure obligation on Form 8-K and that foreign private issuers do not have Form 8-K reporting obligations under U.S. federal securities laws, it remains to be seen whether the SEC will issue a rule compelling foreign private issuers who operate mines in the United States to make comparable disclosure on an appropriate form.

In addition, the new periodic reporting requirements will apply to any Form 10-Q quarterly reports or any Form 10-K annual reports filed by mine operators on or after July 21, 2010. While not specifically addressed in the Act, it is expected that foreign private issuers will be required by the SEC to include the mandated disclosure in their Form 20-F or Form 40-F annual reports. As virtually all of the new disclosure obligations imposed by Section 1503 refer to the standards of the Mine Safety Act and the MSHA, mining operations outside the United States will not be subject to most of these new requirements.

Payments By Resource Extraction Issuers to Government Entities

Companies engaged in the commercial development of oil, natural gas, or minerals will be required to include in their annual reports information relating to any payment made by the company, a subsidiary or an entity under the company's control to the U.S. federal government or a foreign government (including a department, agency or instrumentality of a foreign government) for the purpose of such commercial development. Section 1504 defines "commercial development of oil, natural gas, or minerals" to include exploration, extraction, processing, export, and other significant actions relating to oil, natural gas, or minerals, or the acquisition of a license for any such activity. The SEC is authorized to make further determinations as to what constitutes a foreign government and commercial development of oil, natural gas, or minerals.

Issuers must disclose non-de minimis payments made to further the commercial development of oil, natural gas, or minerals, including taxes, royalties (including license fees), production entitlements, bonuses, and other material benefits that the SEC, consistent with the guidelines of the Extractive Industries Transparency Initiative (to the extent practicable), determines are part of the commonly recognized revenue stream for such commercial development. Information concerning the Initiative can be found at

Within 270 days after the date of enactment of the Act (i.e., no later than April 17, 2011) the SEC must promulgate final rules requiring issuers to include the required payment disclosure in their annual report. Issuers will be required to disclose (i) the type and total amount of such payments made for each project relating to the commercial development of oil, natural gas, or minerals and (ii) the type and total amount of such payments made to each government entity.

Section 1504 also specifies that the required information must be included in the issuer's annual report in an interactive data standard to be established by the SEC. Furthermore, electronic tags must identify, for any payments made to a government entity, the following information:

  • Total amounts of payments by category;
  • Currency used to make payments;
  • Financial period in which payments were made;
  • Business segment of the issuer that made the payments;
  • Government that received the payments and the country in which the government is located;
  • Project to which such payments relate; and
  • Such other information as the SEC may determine is necessary or appropriate in the public interest or for the protection of investors.

These new disclosure obligations will apply to an issuer's annual report for the first fiscal year end on or after the date on which the SEC promulgates final rules implementing this section.

Conflict Minerals

Manufacturing companies will be required to disclose annually whether a specified list of "conflict minerals" necessary to the functionality or production of a product manufactured by such companies originates in the Democratic Republic of the Congo ("DRC") or an adjoining country. While it is expected that this provision will largely apply to manufacturers of jewelry and various consumer electronic devices, it is likely that the disclosure and audit requirements discussed below will in turn give rise to record keeping and compliance obligations on the part of companies mining conflict minerals in such jurisdictions.

Section 1502 of the Act defines "conflict minerals" as:

  • columbite – tantalite (coltan);
  • cassiterite;
  • gold;
  • wolframite;
  • any of their derivatives; and
  • any other mineral or its derivative determined by the U.S. Secretary of State to be financing conflict in the DRC or an adjoining country.

Issuers who are subject to this provision must file with the SEC and publish on their websites a report providing a description of the measures they have implemented to exercise due diligence on the source and chain of custody of such minerals. Section 1502 specifically requires that such measures must include an independent private sector audit of such report that is conducted in accordance with standards established by the Comptroller General of the United States, in accordance with rules promulgated by the SEC, in consultation with the U.S. Secretary of State. The report must also describe (i) the products manufactured or contracted to be manufactured that are not DRC conflict free (i.e., products will be considered "DRC conflict free" if they do not contain minerals that directly or indirectly finance or benefit armed groups in the DRC or an adjoining country); (ii) the entity that conducted the independent private sector audit; (iii) the facilities used to process the conflict minerals; (iv) the country of origin of the conflict materials; and (v) the efforts to determine the mine or location of origin with the greatest possible specificity. Furthermore, the issuer submitting the report must certify the audit. Companies operating mines in the DRC and adjoining countries should expect that issuers subject to these requirements and their auditors will be making demands for information (and possibly access to their mines) to satisfy these reporting obligations.

Section 1502 states that the SEC must promulgate regulations implementing these conflict minerals requirements no later than 270 days after enactment of the Act (i.e., by April 17, 2011). Issuers will be required to comply with these disclosure obligations on an annual basis, commencing with the annual report for the first full fiscal year that begins after the SEC rules become effective.

Kevin Cramer practices U.S. mergers & acquisitions and securities law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.