New rules for rehabilitating mine sites

In early March of this year, the government of Quebec added provisions to the Mining Act and its attendant regulation that oblige the holders of mining rights and mining operations to restore the sites affected by their activities.

These new requirements apply to mining operations and exploration that necessitate the movement of a large volume of materials and to tailing accumulation areas.

The holders of mining rights and operators are now required to submit a rehabilitation plan and to provide a financial guarantee in some cases.

Quebec offers tax relief for exploration

By featuring several tax breaks in its latest budget, the government of Quebec hopes to promote exploration throughout the province and mine development in the Far North.

The province is set to implement a refundable duties credit for small and medium-sized exploration companies that work with financial institutions as partners. Firms with promising targets in Quebec will be able to apply to the Ministry of Natural Resources for a share of the $9-million program.

Application details will be specified over the next few months, and corresponding amendments to the Mining Duties Act are expected to go to the National Assembly in the fall. The duties credit will apply as soon as the legislation goes into effect and last for five years, or until the $9 million is spent.

Also, a period of exemption from paying mining duties will be granted to any company that opens a new mine north of the 55th Parallel (north of Schefferville in the east and north of Poste-de-la-Baleine in the west). Mining duties, which amount to 12% of annual profits, will not be payable for the first 10 years of operation, or up to 10% of the value of the business’s assets.

The measure is designed to compensate for the relatively high operating costs incurred at northern-based operations and encourage companies to process their ore in Quebec.

Furthermore, the income (if earned since May 12, 1994) generated by mine site restoration funds will no longer be taxable under the Mining Duties Act.

Quebec’s existing Mining Exploration Support Program (administered by the Crown-owned Societe Quebecoise d’exploration miniere, or Soquem, and set to end next year) will be replaced by the new Mining Investment Stimulation Program. The new 3-year, $2-million-per-year scheme will enable Soquem to participate in the development of deposits by small and medium-sized companies.

Meanwhile, Quebec’s finance and resources ministries will consider extending the time frame within which flow-through-share-financed exploration work must be committed. The current limit is 60 days.

“Putting a mine into production requires major investments,” says the province’s minister of Natural Resources, Francois Gendron. “Quebec needs a tax system that encourages investment, and that’s what we’ve done in this budget.”