Under the Ontario Mining Act[1] (the Act), mining proponents are only permitted to commence mining operations after they file a closure plan with the Director of Mine Rehabilitation (the Director). A complete closure plan includes a number of requirements, including that the operator has provided financial assurance in a form and amount acceptable to the Director, that public notice of the intended activities has been provided, and that the proponent has consulted with Aboriginal communities in relation to the proposed mining operations.[2]
Closure plans remain in place for the entire life cycle of the mine, but they must be revised or updated under certain circumstances. These circumstances include where a mining operator can no longer comply with the closure plan, or when the Director requires that a revised closure plan be filed.[3] The Director has broad powers to order that an operator prepare a revised closure plan[4]. In practice, the Director may issue such an order in the event an operator files the prescribed form of notice of material change. Section 144(2)(b) of the Act provides that an operator must file a notice of material change when: (i) an expansion or alteration of the project is planned; (ii) there has been a change in the ownership, occupancy, management or control of the project; or (iii) any other material change has occurred that could reasonably be expected to have a material effect on the adequacy of the closure plan.
Acquisitions of existing Ontario mining projects, which result in any change in the ownership, occupancy, management, or control of the project, would almost certainly require a notice of material change to be submitted by the operator to the Director, which could in turn trigger an order from the Director that the proponent submit an amended closure plan.
Section 143(2) of the Act deals with amendments to closure plans. The current version of the Act does not specify a list of requirements for proponents to satisfy when amending a filed closure plan, but does specify that an increase in the amount of financial assurance previously provided may be required as part of the amendments to the closure plan. However, the Ontario Legislature has passed certain amendments to the Act, which will require that where an amended closure plan is necessary, either as determined by the mining proponent or as ordered by the Director, that the proponent will need to satisfy the following requirements prior to filing an amended closure plan:
- The proponent must have given a notice of material change to the Director in the prescribed manner;
- Public notice of the changes must have been provided (if required by the Director within 45 days of receiving the notice of material change);
- The Director must be satisfied that appropriate Aboriginal consultation has taken place;
- The proponent must have submitted an amendment to the closure plan that includes financial assurance as required under the Act and the regulations, and which meets any other prescribed requirements; and
- The proponent must have received written confirmation from the Director that the amendment to the closure plan has been filed.
Although these proposed requirements mirror the initial requirements that a proponent must satisfy when submitting its original mine closure plan, operators now need to be mindful that in connection with any proposed amendments to its existing filed closure plan, public notice of its proposed closure plan amendments will now need to be provided and additional Aboriginal consultation may need to be carried out.
Because these amendments could come into force at any time upon the proclamation of the Lieutenant Governor of Ontario, parties negotiating acquisitions of existing Ontario mining projects, which would result in any change in the ownership, occupancy, management, or control of the mine project should expand their due diligence to include a more thorough review of the existing filed closure plan for the mining project and conduct an assessment of whether an amended closure plan may be required to be filed. The acquisition due diligence should also assess whether the existing financial assurance posted with the Director remains adequate in the event an amended closure is required to be filed. In addition, in-depth due diligence regarding Aboriginal interests within the vicinity of the mining project should be conducted, including an analysis of the mine operator’s relationship with local Aboriginal communities, any prior provincial government consultation with those communities in connection with the mine project and the existing closure plan, and a review of any contractual agreements in place between the operator and Aboriginal groups and businesses.
Dentons’ Mining group would be pleased to discuss with you in more depth mine operator obligations under the Ontario Mining Act, and their potential impact on an existing mining project.
[1] Mining Act, RSO 1990, c M.14.
[2] Mining Act, section 140.
[3] Mining Act, section 143(2).
[4] Mining Act, section 143(2) and (3).
