On October 30, 2013, Bill 43, which proposed a complete reform of the Mining Act, was defeated when put to a vote at the Québec National Assembly. On December 5, 2013, the Québec Minister of Natural Resources (the "Minister") tabled Bill 70, an Act to Amend the Mining Act (the "Act"), which represented a more conciliatory mining reform project than Bill 43. After being fast-tracked, the Act was adopted on December 10.
The Act makes a number of changes to the Québec mining regime, namely, with respect to increasing the responsibility of mining lease holders, the transparency of mining project approval mechanisms and the power of provincial and local authorities to monitor mining activities.
Several Requirements in Bill 43 Withdrawn
The Act rejects various changes that were previously proposed in Bill 43, namely:
- The Minister will not have the power to refuse any application for a mining lease or to terminate any lease for reasons of public interest. The Act provides for such power only in the case of sand, gravel or stone mining leases.
- Mineral processing plant construction projects and operation projects will not necessarily be subject to an environmental assessment and review. Rather, under the Act, the need for an environmental assessment is limited to metal or asbestos ore projects where the processing capacity is 2,000 metric tons or more per day. The requirement under the Act to provide a scoping study is seemingly less onerous than a feasibility study.
- An applicant for a mining lease will not be required to file an ore processing feasibility study in Québec. The Act provides instead that the applicant must file a scoping and market study as regards ore processing in Québec.
- The Minister may not grant mining claims by putting them up for auction.
- The Minister will not have the power to request that regional county municipalities make changes to their land use and development plans.
Major Changes to the Mining Act
The Act introduces the following key changes:
1. Increased obligations and responsibilities for mining rights holders:
- An application for a mining lease must now be accompanied by a project feasibility study as well as a scoping and market study with respect to ore processing in Québec.
- A mining lease cannot be granted before a mine rehabilitation and restoration plan is approved by the Minister and a certificate of authorization is issued in accordance with the Environment Quality Act (Québec).
- Within 30 days following the issue of a mining lease, the lessee must establish a monitoring committee to foster the involvement of the local community in the project as a whole.
- Certain mining claims holders and operators shall be required to provide a financial guarantee covering 100% of the estimated cost to carry out the work in their mining site rehabilitation and restoration plans. Up to now, the Mining Act only required that 70% of the estimated cost be guaranteed.
- Rehabilitation and restoration work must begin within three years after operations cease, unless the Minister authorizes an extension.
- The Act also provides that fines for offences will be raised considerably, ranging from $1,000 to $1,000,000 in the case of a natural person, and from $3,000 to $6,000,000 in the case of a legal entity.
2. Increased transparency:
- Mining rights holders must provide the Minister with an annual
report indicating the quantity and value of the ore extracted the
previous year, and the amount of the royalties paid under the
Mining Tax Act.
These measures are consistent with the Minister of Finance's proposal for a new mining tax regime released on May 6, 2013, referred to in this article.
- The Minister will make public the rehabilitation and restoration plans as well as all the other documents and information it has obtained from the mining claims holders for the purposes of the Act, except for the exploration work reports, which will remain confidential for a period of five years following the date of the work.
- In the case of a metal mine project where the mine has a production capacity of less than 2,000 metric tons per day, before submitting an application, an applicant for a mining lease shall hold a public consultation on the project in the region where the project is situated.
- Metal or asbestos ore processing projects where the processing capacity is 2,000 metric tons or more per day will be subject to an environmental impact assessment and review. Previously, this requirement applied only in the case of projects where the processing capacity was 7,000 metric tons or more per day.
- An applicant for a peat lease or a lease to carry on an industrial activity or to engage in commercial export shall hold a public consultation on the project in the region where the project is situated after submitting the application.
3. Increased powers for the Minister and municipalities:
- Regional county municipalities will have the power to delimit any "mining-incompatible territory" in their land use and development plans. The Minister will not have the power to request that regional county municipalities make changes to their plans, contrary to what was proposed in Bill 43.
- The Government may, on reasonable grounds, require that the economic spinoffs within Québec of mining the mineral resources authorized under the mining lease or mining claim be maximized.
- In the case of a sand, gravel or stone lease, the Minister may refuse to grant a lease application or may terminate a lease at any time on the grounds of public interest. If the lease is terminated however, the Minister shall grant the lease holder a lease in respect of another parcel of land or shall compensate the holder for the loss suffered.
Evidenced by its quick adoption, the Act achieves a certain balance where the last four reform attempts had failed, and represents a major step for the mining industry in Québec.
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.