Mining Prospects

Trends and Developments in Mining Law in Canada and Internationally

Chile Getting Ready to Supply Minerals for the Upcoming Electric Car Industry: What’s Next for Cobalt

Posted in Mining
Frederico MarquesEtienne Ravilet Guzman

In an interview on 27 August, 2017, the Executive Vice-President of Chile’s Corporation for the Promotion of Production (“CORFO”), Eduardo Bitran, announced that CORFO and the National Service of Geology and Mining (“Sernageomin”) are conducting surveys in the La Cobaltera area in Chile’s Atacama region in search for cobalt deposits. Cobalt deposits are also known to exist in the Coquimbo region.[1]

Bitran cited CORFO’s expectations that cobalt demand should considerably increase in upcoming years, and noted Chile’s potential for developing this mineral: “If we were to produce 15,000 annual tons of cobalt by 2035, we would be talking about a business worth USD $975 million, considering the current price of this mineral”.[2] A report on La Cobaltera’s suitability for cobalt mining is scheduled to be released later this month.[3]

This could be an interesting opportunity for Canadian investors, as demand for cobalt is set to increase by 34% per year until 2026, and by 2021 demand could fall short of production by up to 8,000 tons. Cobalt at the London Metal Exchange traded at $32,000 a ton in late 2016, and increased to $56,000 a ton in 2017. These trends go hand in hand with increased cobalt usage in battery manufacturing for the electric car industry, which will be further boosted by China’s recent announcement to join France and the United Kingdom in setting a ban on sales for all fossil-fueled powered vehicles.[4] Continue Reading

Changing Tack: BC NDP Accelerates Increase in Carbon Tax and Moves Away from Revenue Neutrality

Posted in Climate Change, Environmental Issues
Selina Lee-Andersen

BC’s recently sworn-in New Democratic Party (NDP) government presented its first provincial budget on September 11, 2017. Among the policy measures announced were changes to the BC carbon tax. In particular, the Budget 2017 Update (2017/18 – 2019/20) provides for the following:

  • As of April 1, 2018, the carbon tax will increase by $5 per tonne of carbon dioxide equivalent (CO2e) per year until it reaches the federal target carbon price of $50 on April 1, 2021 (one year before Ottawa’s 2022 deadline). BC’s carbon tax is currently set at $30 per tonne of CO2e.
  • Part 2 of the Carbon Tax Act has been repealed, meaning that the requirement for the provincial Minister of Finance to prepare the Carbon Tax Report and Plan will no longer apply after September 11, 2017. In addition, this means that the Carbon Tax Act will no longer require that revenue measures be introduced to offset carbon tax revenues. This will allow the government to spend carbon tax revenues on emission reduction measures or other green initiatives, rather than returning carbon tax revenues to taxpayers.

Continue Reading

New China Guidelines on Overseas Investments Encouraging for the Natural Resources Sector

Posted in Mining
Shea SmallJoyce LeeCraig SpurnBobby Wang

On August 17, 2017, China’s NDRC, Ministry of Commerce, the People’s Bank of China and the Ministry of Foreign Affairs jointly released their Opinions on Further Guiding and Regulating the Directions of Overseas Investments (the “Guidelines”).  The stated objectives of the Guidelines are to improve the macro guidance on overseas investments, further guide and regulate the directions of overseas investments, promote the sustainable, rational, orderly and healthy development of overseas investments, effectively prevent all types of risks and properly meet the needs of national economic and social development.

The Guidelines are encouraging for China’s continued overseas investment in the natural resources sector.  The Guidelines indicate the China will support domestic enterprises with adequate capabilities and qualifications to actively and prudently invest overseas in an effort to, among other things, make up for China’s shortcomings in energy and resources.  In particular, Chinese domestic enterprises have been encouraged to participate in the exploration and extraction of offshore oil and gas, mining and other energy resources based on prudent assessment of cost benefits.

In the past couple of years, we have seen several major Chinese overseas investments in the natural resources sector including:

  • Yancoal’s ongoing acquisition from Rio Tinto of a majority interest in the Hunter Valley coal assets in Australia
  • China Moly’s acquisition from Freeport of a majority interest in the Tenke copper and cobalt mine in the DRC
  • Sinoenergy’s acquisition of Long Run Exploration, an intermediate oil and natural gas public company in Canada*

While we expect that overseas investments in the natural resources sectors by Chinese domestic enterprises will continue apace, we also expect that Chinese acquirers will spend more time on technical and legal diligence, cost benefit analysis and compliance issues in making their overseas investments.

* McCarthy Tétrault acted for Sinoenergy on this acquisition

A Mining Claim is not an “Interest in Land” – Ontario Court Dismisses Expropriation Claim

Posted in Mining
Andrew Kalamut

Overview

In the decision of 1520658 Ontario Inc. v. Her Majesty the Queen, 2017 ONSC 4141 released earlier this month, Justice Goldstein of the Ontario Superior Court of Justice determined that a mining claim is not an equitable interest in land under the Ontario Expropriations Act.

This decision lays out the framework for the analysis of determining the definition of land, specifically the interplay between the Mining Act and the Expropriations Act, and may have broader implications for the mining and excavation industries as a whole. Continue Reading

Mining in Latin America: An Overview of Mining Law in Argentina, Brazil, Chile, and Peru

Posted in Mining
Frederico Marques

The article “Mining in Latin America: An Overview of Mining Law in Argentina, Brazil, Chile, and Peru” by Frederico Marques and Etienne Ravilet Guzman (available here) offers an in depth analysis of the regulatory framework for investment and development of mineral exploration and mining projects in Argentina, Brazil, Chile and Peru. The goal is to provide stakeholders with a broad understanding of the suitability of these Latin American jurisdictions for mineral exploration and mining projects. It will also assist Canadian and international companies, as well as policy makers, to navigate contemporary challenges in the sector and at the same time identify common grounds and trends in the region. Each case study addresses foreign investments, mineral exploration and mining rights, main taxes, royalties, government incentives and environmental regulations.

The outcome is a comprehensive legal overview of mineral exploration and mining activities in these jurisdictions with practical insights to doing business in this increasingly international industry; as understanding and navigating these frameworks is essential to minimize risk, increase efficiency and attract capital.

http://mccarthy.ca/pubs/MINING_LAW_Latin_America-McCarthy-Tetrault-2017.pdf

 

 

Yaiguaje v. Chevron Corporation – The Enforcement Saga Continues

Posted in Litigation, Mining
Andrew Kalamut

What’s At Stake?

In 2015, the Supreme Court of Canada in Chevron Corp. v. Yaiguaje (discussed here) determined that Ontario courts have jurisdiction to adjudicate a recognition and enforcement action against an Ontario affiliate of a foreign corporation. In this case, the enforcement action was brought by Ecuadorian plaintiffs against Chevron Corporation (“Chevron”), a US-based corporation, and its seventh level indirect subsidiary, Chevron Canada Limited (“Chevron Canada”). Continue Reading

Expert Panel Recommends Significant Changes to Canada’s Environmental Assessment Regime

Posted in Aboriginal and Environmental Issues
Joanna RosengartenBryn Gray

The following post by Joanna Rosengarten and Bryn Gray on our Canadian ERA Perspectives blog may be of interest to readers of this blog: Expert Panel Recommends Significant Changes to Canada’s Environmental Assessment Regime

On April 5, 2017, Environment and Climate Change Canada released the report of an external Expert Panel that was established in August 2016 to review the scope and process of federal environmental assessments under the Canadian Environmental Assessment Act, 2012 (“CEAA 2012”). The Expert Panel’s Report contains numerous recommendations which, if implemented, would result in a fundamentally different federal environmental assessment (“EA”) process to the one that is currently in place.

BC Courts Taking Jurisdiction Over Foreign Disputes

Posted in Mining
Nicholas HughesJessica Dorsey

For the second time in recent months, a British Columbian court has allowed a civil case to proceed against a resource company in British Columbia for wrongs allegedly committed outside of Canada.

On October 6, 2016, the British Columbia Supreme Court determined that a civil claim alleging human rights violations at an Eritrean mine could proceed to trial against a British Columbia mining company (see Araya v. Nevsun Resources Ltd., 2016 BCSC 1856: British Columbia Supreme Court refuses to strike civil claims alleging human rights violations at Eritrean mine).

On January 26, 2017, the British Columbia Court of Appeal determined that seven Guatemalan nationals who were allegedly shot while protesting at a mine in Guatemala can continue an action in British Columbia against a British Columbia mining company, Tahoe Resources Inc. (Garcia v. Tahoe Resources Inc., 2017 BCCA 39). In doing so, the Court of Appeal reversed the decision of the chambers’ judge, who had stayed the case on the basis that Guatemala was clearly the more appropriate forum for the action.

Garcia is significant, both for Canadian resource companies operating abroad and for foreign nationals alleging that Canadian parent companies are responsible for wrongs committed in the complainants’ home countries. Continue Reading

Mining Activities and Land Use Planning – Québec Delegates New Powers to Regional County Municipalities

Posted in Mining
Dominique Amyot-BilodeauBianca Déprés

La version française suit /  French language version follows

On January 11, 2017, the Minister of Energy and Natural Resources of Québec (“MERN“), Mr. Pierre Arcand, published new Government Policy Directions (in French only) aimed at promoting the harmonious coexistence of mining activities with other uses of the territory. On the same day, the Québec Government also issued Decree 1075-2016, which sets December 14, 2016 as the date on which section 108 of the Act to amend the Mining Act (2013, chapter 32) came into force.

As a result of these developments, which follow the 2013 reform of Quebec’s Mining Act, regional county municipalities (“RCM“) can now delimit, in their land use and development plans, any territory deemed incompatible with mining activities. These territories will be withdrawn from mining exploration and operations in the Province, subject to certain conditions. Continue Reading