Quebec Tightens Rules On Financial Guarantee Requirements For Rehabilitation And Restoration Plans

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On February 13, 2013, a notice was published in the Gazette officielle du Québec by the Minister of Natural Resources, Martine Ouellet, announcing amendments to the Regulation respecting mineral substances other than petroleum, natural gas and brine (the “Regulation”). All of these amendments pertain to the rules applicable to financial guarantee requirements for rehabilitation and restoration plans under Section 231 and following of the Quebec Mining Act.

The draft regulation amends the Regulation by increasing from 70% to 100% the financial guarantee required to ensure performance of the work required by the rehabilitation and restoration plan and by broadening the scope of the guarantee from being required only for the rehabilitation and restoration of accumulation areas (for mineral substances, overburden, concentrates and tailings), to being required for the rehabilitation and restoration of the entire mine site.

The payment schedule for the financial guarantee will also be amended for companies who are currently engaging in exploration work as well as for those engaging in mining operations or operating a concentration plant.

In the case of companies engaging in exploration work, under the current Regulation, the total guarantee must be submitted within 15 days after the rehabilitation plan is approved, if the exploration work is expected to last 1 year or less, or the financial guarantee can be submitted in annual payments if the exploration work is expected to last more than 1 year. The amendments now provide that every holder of mining rights who engages in exploration work must provide the financial guarantee to the Minister before the beginning of exploration work.

For operators engaging in mining operations in respect of tailings or mineral substances set out in the regulations, or operating a concentration plant, the current Regulation provides that their annual payments will be made according to rules set forth in a table. However, the amendments to the Regulation provide that the guarantee must now be submitted to the Minister in three payments, the first of which would represent 50% of the total guarantee and would be paid in the 90 days after approval of the rehabilitation plan is received. The subsequent payments of 25% each would be made on the anniversary date of approval.

The draft regulation also reviews certain forms of financial guarantee and requires the filing of a restoration plan for the movement of 1000 m3 or more of unconsolidated deposits.

The new amendments will also apply to operators who are currently engaging in mining operations or operating a concentration plant and whose restoration plan has been approved prior to the draft regulation coming into force. These operators will also have to provide the financial guarantee for the restoration of the mine site in three payments, the first payment being required at the latest one year after the draft regulation comes into force.

The draft regulation is set to come into force on February 28, 2013.

The current Regulation is available here:  http://www2.publicationsduquebec.gouv.qc.ca/documents/lr/M_13_1/M13_1R2_A.htm

The draft regulation is available here:http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=1&file=2462.pdf

Topics:  Financial Guarantee Requirements, Minerals, Natural Resources, Quebec Mining Act, Rehabilitation and Restoration Plans

Published In: Energy & Utilities Updates, Environmental Updates, Finance & Banking Updates, Zoning, Planning & Land Use Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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