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18 | LEXPERT • June 2014 | www.lexpert.ca take a pause and say, 'Look, there are methods of doing that here and if there are, it should at least be considered.'" But for all the good intentions, he says, because it forms part of the lease application, "it just adds another level about what the ask from the government is going to be. If you're talking about iron ore, does processing mean processing into pallets or does it mean processing into steel? Do I have to build the steel mills here? " at's one of the uncertainties." Kazaz is also slightly troubled by what's expected from mine leaseholders under a new economic-spinoff provision. " e new rules give the Minister of Natural Resources the power to require maximization of the economic spinoff s within Qué- bec before mining begins, and again in 20 years. Once commit- ments are made and agreed upon, the mine operator may be re- quired to form a monitoring committee with representation from the local community to make sure the promises are kept. "" e committee would monitor the commitments made on eco- nomic spinoff s over the life of the lease," says Kazaz, adding that, again, there is ambiguity over exactly what's expected. "It's not entirely clear whether it means you have to spend a certain amount of the operating budget for local businesses, or what it actually means in terms of labor or employ- ment or purchasing. But those are the types of things they're looking for – I think – when they talk about this eco- nomic spinoff committee." What is clear is that going forward leaseholders will also be required to provide the minister with information about the quantity of ore extracted, its value, and the duties paid under the Mining Tax Act. Most of the infor- mation will be made public. LIKE SO MANY other jurisdic- tions, Québec's new mining frame- work was guided by sustainable devel- opment principles. In a move that increases the level of scrutiny mine operators can expect to receive, all mining projects with production capacity of more than 2,000 tonnes a day will be subject to a public consultation process before a mining lease is granted by the government, as well as an environmental assessment. " at is sharply lower than the previous regime that required those kinds of assurances from mines producing 7,000 tonnes a day or more. All projects relating to rare earth processing will be subject to environmental assessment regardless of their processing or production capacity. Erik Goldsilver, a partner at Cassels Brock & Blackwell LLP in Toronto, says in his view, the lower assessment threshold may turn out to be the most signifi cant change of all. "I think it's pretty typical in most jurisdictions but that assess- ment is going to require a lot of work to get done," he says. "It will string things out. It's another piece in the puzzle that has to be THE REVISIONS to the Mining Act defi nitely introduce con- cepts you may not see in other jurisdictions, says Charles Kazaz, a partner at Blake, Cassels & Graydon LLP. For example, under the changes, operators applying for a mining lease in Québec are now required to conduct a scoping and market study that lays out op- tions for processing the raw ore in the province. It has to be submitted as part of the lease application. "A lot of the ore mined here is processed off shore," says Kazaz, "so in order to increase the value of ore that's eventually exported, the government is requir- ing you to prepare a market study that shows whether it's feasible to process it here. "It's a bit fuzzy for a lot of operators because once you get the study done, you then have to sit down with the government and see what the demands are. And that can hold up the lease. But the big issue at this point is a lot of the parameters around what the study entails – how you do it, what market you take into consider- ation, how far downstream you have to go in terms of processing – is not entirely clear at this stage." Kazaz, who is based in Montréal, sidesteps the question of whether Québec is leaving itself open to allegations it is practicing resource nationalism by pressuring operators to process locally in order to get a lease. "I think what the government is trying to avoid is a knee-jerk reaction of taking the ore out of the ground and sending it off to a processing facility somewhere else. I think what they want to do is « MINING IN QUÉBEC "It's not entirely clear whether it means you have to spend a certain amount of the operating budget for local businesses, or what it actually means in terms of labor or employment or purchasing. But those are the types of things they're looking for – I think – when they talk about this economic spinoff committee." Charles Kazaz > Blake, Cassels & Graydon LLP

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