Impact of Quebec’s reclamation rules
As the outlook brightens for the mining sector in Quebec, mining operators will have to be diligent in factoring in enhanced reclamation rules for new projects. It’s been one year since the new rules were enacted. They were not a surprise and have provided clarity to the mining industry on what is required of them. But the rules have a financial implication on projects, as companies have to get the financings and guarantees in place before extraction and getting revenues, or before the capital expenditures have been repaid.
While reclamation plans have been mandatory in Québec since 1995, the December 2013 rules established tighter control over the reclamation of mining sites. They have to be implemented in conjunction with environmental rehabilitation rules under the jurisdiction of Quebec’s Minister of Sustainable Development, Environment and Climate Change (MDDELCC) and are designed to ensure that mining sites will be adequately rehabilitated after the permanent shutdown of a mine.
The biggest changes brought in by the 2013 mine reclamation rules are:
• Now, a mining lease may not be granted before the reclamation plan is approved by the Minister of Natural Resources and Energy (MNRE).
• A reclamation plan must contain a “detailed” estimate of the expected reclamation costs and, in the case of an open pit mine, must include a backfill feasibility study.
• A reclamation plan must include a guarantee covering 100% of the anticipated reclamation costs (compared with 70% previously). This must comprise very clearly the costs associated with the rehabilitation and restoration.
• The MDDELCC now has a veto power over the reclamation plan. Previously, the Minister was only to be “consulted” by the MRNE.
• Work to implement the reclamation plan must begin within three years after operations cease. In some cases, the Minister may exceptionally require that reclamation begin within a shorter time frame or authorize one or more time extensions.
• The MRNE may release a mine operator from his reclamation obligations only if satisfied that the condition of the land affected by the mining operations no longer poses a risk for the environment or for human health and safety and does not pose any risk of acid mine damage. The MDDELCC has a right of veto over the release to be granted by the MRNE.
• Inspectors of MRNE now have officially the power to inspect mining sites in relation to preventive measures or reclamation work.
• A new section of the Mining Act—which is not yet in force—will provide that a reclamation plan must be made accessible to the public at least 30 days before any public consultation begins, for mines with a production capacity of less than 2,000 metric tons per day. Larger mines are subject to a full public consultation within the framework of Quebec’s environmental assessment and review process.
• An individual who fails to file and get the approval of a reclamation plan may now face penal charges with the risk of a fine of up to $500,000. The fine is $3,000,000 in the case of a corporation or a partnership. The previous maximum fines were $3,500 in the case of an individual and $6,975 in the case of a corporation.
Mining companies planning to open a new mine in Quebec in the context of the recently revived and enhanced Plan Nord, or planning to carry out specified mining activities in the province, have to factor these new rules in their financial and technical planning.
Recent new mines have already begun to operate under these new rules which are more stringent than the previous rules. They have the advantage however of long-term stability as major political parties have stated that these rules will not be changed in any foreseeable future. They are the result of three years of efforts and often heated parliamentary debate to update and tighten up the rules that govern the reclamation of new mining sites.