In 1996, Part VII of the Mining Act was amended by Bill 26, the Savings and Restructuring Act, to create a self-certification system for mine closure and rehabilitation plans. The ECO's 1996 annual report noted that changes to Part VII included:

• more flexible financial assurance provisions in mine closure plans so that mine developers can pass a financial test or pledge financial assurance using less secure assets or royalties instead of providing cash or bonds.
• self-certified closure plans that do not require approval from the Ministry of Northern Development and Mines before mine operations begin.

In response to ECO concerns about the failure of MNDM to post these amendments on the Environmental Registry, the ministry agreed to post the amended regulation, which was expected to be introduced and posted by late 1996. However, it was three years later, in August 1999, that MNDM posted a proposal for the amended regulation on the Registry, along with the new Mine Rehabilitation Code, under Part VII of the Mining Act.

The regulation, O. Reg. 240/00 – “Mine Development and Closure under Part VII of the Act,” – was filed on April 25, 2000, and took effect on June 30, 2000. The regulation makes major changes to the previous regulation under Part VII. The most significant changes are detailed below. Part VII of the Mining Act was proclaimed on the same day that the regulation took effect.

O. Reg. 240/00 introduces the newly developed Mine Rehabilitation Code of Ontario, which sets out minimum requirements relating to mine rehabilitation. All persons engaged in rehabilitating mines and mine hazards must comply with the code. The code includes requirements, guidelines and standards that relate to the following objectives:

• ensuring that inadvertent access to mine openings from the surface is prevented through the use of reinforced concrete or steel caps or backfilling.
• limiting potential hazards and maintaining public safety around open pits, and in relation to the stability of crown pillar and room and pillar operations, and restoring the site to an appropriate land use.
• ensuring the long-term physical stability of tailings dams and other containment structures.
• ensuring that surface water quality is unimpaired and satisfactory for aquatic life and other beneficial uses, and identifying potential contaminants to groundwater.
• determining the potential for significant metal leaching or acid rock drainage and, if needed, ensuring that there are effective prevention, mitigation and monitoring strategies.
• ensuring safety of sites by requiring that all lands, water management structures and other mine-related structures are left in physically stable condition.
• stabilizing surface materials and providing protection from wind or water erosion, improving the appearance of the site, ensuring vegetation growth, and supporting the designated end use of the site.

O. Reg. 240/00 also sets out requirements for the self-certified closure plans introduced in Bill 26: mining companies must file a self-certified closure plan with MNDM, certified by a company’s chief financial officer and another senior officer. Prescribed elements of the closure plan must be approved by qualified professionals, including a professional engineer. The closure plan must include information such as current project site conditions, a project description, rehabilitation measures, monitoring programs and procedures, and expected ultimate site conditions.

In its Registry notices, MNDM stated that this streamlined closure plan submission process is intend- ed to make the system more efficient and will uphold Ontario’s “stringent environmental standards.” Prior to these amendments, MNDM said, the closure plans had to be extensively reviewed by staff at MNDM and the Ministries of Labour, Natural Resources and Environment before they were approved. Instead, the new process allows proponents, along with all involved qualified professionals, to review and certify their own closure plans and the provisions for financial assurance. MNDM maintained that this new method of self-assessment will greatly reduce the length of the closure plan review process.

Although the new closure plan submission process involves self-assessment and self-certification, MNDM is still required to place notice of proposed mine closure plans on the Registry for public notice and comment, which preserves the opportunity for a member of the public to apply for leave to appeal a decision on a mine closure plan. MNDM has 45 days after receiving a closure plan before it is acknowledged or deemed to be filed. Therefore, the ministry must move quickly to post the clo- sure plan on the Registry. Under the new regulation, MNDM may return a closure plan to a proponent for refiling if it does not sufficiently address all of the prescribed requirements for a certified closure plan. These checks may help to prevent proponents from certifying closure plans that do not protect the environment.

Also, the requirement that elements of the closure plan be approved by qualified professionals, including a professional engineer, should help to ensure that all potential rehabilitation and remediation issues are properly addressed. The information required for inclusion in closure plans is extensive and detailed, and proponents must consider many environmental issues and potential problems. Closure plans must also comply with the specific standards, procedures and requirements in the new Mine Rehabilitation Code. The code should have a positive impact on the environment, as it emphasizes environmental health and public safety.

In July 2001, MNDM advised that it had a Memorandum of Understanding with MOE, MNR and MOL to review all mine closure plans. There remains a 45-day period to respond to the closure plan after it is submitted. Ultimately, if there are problems with compliance with the regulation or code, the Director of Rehabilitation has the power to require amendments to the closure plan. Ministries may also carry out their own site inspections after the closure plan has been filed.

Section 145 of the amended Mining Act states that the financial assurance required as part of a closure plan, to ensure that there will be funds available for mine closure, may be in the form of compliance with a prescribed corporate financial test. This means that mining companies may meet the financial assurance requirements by satisfying credit rating criteria instead of posting financial security such as cash, a letter of credit or a bond. O. Reg. 240/00 sets out this corporate financial test. A proponent meets with the corporate financial test for the entire life of the mine if the proponent’s credit rating meets or exceeds the satisfactory credit quality/investment grade ratings from two stated credit rating services. A proponent meets with the corporate financial test for the first half of the life of the mine (if the first half of the life of the mine is at least four years) if the proponent’s credit rating meets or exceeds the adequate credit quality/investment grade ratings from two credit rating services. Companies that meet the corporate financial test must monitor their credit ratings and inform MNDM if their credit ratings are downgraded, or if any other matters materially affect their financial assurance status.

The change to O. Reg. 240/00 that accepts a credit rating as a form of financial assurance has been criticized on the basis that it provides less assurance than realizable financial securities. If the government does not require adequate financial assurance, there is a danger that there will not be sufficient funds available when mine rehabilitation and remediation is necessary, and that Ontario taxpayers will be required to pay for this. This has happened before. There are many abandoned mines in Ontario that must be rehabilitated at public expense. For example, the ECO’s 1999/2000 annual report described the environmental contamination caused by the abandoned Kam Kotia mine and mill site near Timmins, and the expected clean-up cost of over 41 million dollars (see Rehabilitating the Abandoned Kam Kotia Mine for an update). However, O. Reg. 240/00 does require a high grade credit rating for a proponent to meet the corporate financial test for this form of financial assurance, and only large companies that are sufficiently capitalized and have the required credit rating may rely on the new financial assurance provisions.

O. Reg. 240/00 also removes a provision in the previous regulation that required mining proponents with projects subject to a closure plan to make an annual report to MNDM on the nature and extent of any rehabilitation work, the results of all monitoring described in the closure plan, and any changes in the conditions of the project. There is no provision for annual reporting under O. Reg. 240/00. The ECO is concerned that annual reporting is no longer required, since any move toward self-regulation should be monitored closely by the ministry responsible.

ECO Comment

On balance, this new regulation should have positive environmental impacts. The Mine Rehabilitation Code introduces comprehensive procedures and requirements that should help to ensure environmental health and public safety. Although closure plans are now self-certified, they are still subject to public notice and comment under the EBR, and some degree of scrutiny by MNDM and MOE. In order to facilitate the public’s review of self-certified closure plans, MNDM should consider including hypertext links to the actual proposed closure plans in the proposal notices on the Environmental Registry. These would be similar to the hypertext links that MOE now includes in proposal notices for permits to take water.

The removal of annual reporting on rehabilitation progress is a cause for concern. Where self-regulation is introduced, it is important for the ministry to require and follow up on annual reports by the companies. The ECO would encourage that an annual reporting requirement be reintroduced.

Financial assurance provisions should continue to ensure that proponents will be able to fund any required remediation and rehabilitation. In the long term, the ministries will need to address the question of how to fund the exceptionally large costs of rehabilitating abandoned mines. The ECO believes that MNDM should consider the model provided under the Aggregate and Petroleum Resources Law Amendment Act. Under this model, each aggregate operator contributes levies to special dedicated funds as follows:

• to their own site-specific fund as part of financial assurance for the operation
• to a common floating fund based on production levels
• to municipalities based on production levels.

The Aggregate Producers Association of Ontario (APAO) administers the common floating fund and the rehabilitation program, and decides which sites are to be rehabilitated. As part of the Management of Abandoned Aggregate Properties Fund, APAO also encourages and supports the development of research related to rehabilitation, and monitors the success or failure of completed rehabilitation projects. If the floating fund decreases to an unacceptable level, MNR may impose a fee per tonne of aggregate extracted from pits and quarries to rejuvenate the fund. The ECO sug- gests that this type of model could be adapted to create a floating fund for the rehabilitation of abandoned mine sites.

Recommendation 10: The ECO recommends that MNDM reintroduce an annual reporting requirement in relation to mine rehabilitation.

---

This is an article from the 2000/01 Annual Report to the Legislature from the Environmental Commissioner of Ontario. Table of Contents Information on the official document and its release.

Citing This Article
Environmental Commissioner of Ontario. 2001. "The Mining Act: Part VII Regulation and the Mine Rehabilitation Code." Having Regard, ECO Annual Report, 2000-01. Toronto, ON : Environmental Commissioner of Ontario. 122-125.