Easement rights should not be granted in the case of 2274659 Ontario Inc. v Canada Chrome Corporation based upon reasoning within the following topics relevant to the case;

  • Priority of Rights: "First-Come" Basis
  • Intended Use For Staking a Mining Claim
  • Scope: A Section 51 Hearing
  • The Multiple Use Principle
  • Infringement of the Rights Holder

 

Part Three: Scope - A Section 51 Hearing

The Ontario Mining and Lands tribunal makes decisions under the authority of the Mining Act, Conservation Authorities Act, Oil, Gas and Salt Resources Act, Lakes and Rivers Improvement Act, Assessment Act and the Aggregate Resources Act and is bound by the logical flow of their provisions.

While the Mining Commissioner has the power to grant easements under section 175 of the Mining Act, no such a power exists under section 51 unless an application for the disposition of public lands "lacks consent" (as in the Kamiskotia Ski Resorts Limited v. Lost Treasure Resources Ltd. case) or "consent is refused" by the mining claim holder.  Section 105 of the Mining Act empowers the Mining and Lands Commissioner as the "judge of disputes, claims and questions concerning rights, privileges and interests conferred by or under the authority of the Act."

The Mining Commissioner deduced that the tribunal has the authority to make a decision on easement in this case, noting that "Under subsection 51(4), it [the Mining Act] could and should indicate that the MNDM is asking the Commissioner for a ruling as to whether an application for the disposition of public lands can proceed in the face of a lack of consent or a refusal to consent by a mining claim holder." (Order on Party Status)

If a ruling were to favour easement by the mining tribunal, then the Minister of Natural Resources could proceed to make final deliberations before actually granting an easement to Cliffs. Section 2 of the Public Lands Act clearly states that only "the Minister of Natural Resources has control over the disposition of public lands and no such power has been assigned to the Mining and Lands Commissioner".  However, if the mining tribunal did not favour easement and the Minister of Natural Resources then granted it, there would be serious legal repercussions for the Crown.

Even though the mining court has the authority, it's adjudications within a Section 51 hearing "can only be dealing with a mining claim holder’s priority of right and the effect of that mining claim holder’s “consent or refusal to consent” to waive some measure of his or her priority vis-à-vis the surface rights of the mining claim." The Mining Commissioner must make "a very discreet determination as to a mining claim holder’s rights under the Mining Act and is not jurisdictionally empowered to consider wider issues encompassing the broader mining community and the proposed mining projects when making that determination." (Order on Party Status) To be sure, the mandate of the tribunal, under Section 51, is not to determine which method of transportation, road or rail, is better from an economic, ecological, or social standpoint.

The tribunal has also made the notion of compensation abundantly clear should easement be granted in this case;  "A section 51 hearing under the Mining Act is one in which the tribunal is charged with the task of trying to determine if a claim holder who refuses to consent to disposition of the surface rights (to which it has a prior right) should be required to share in the use of those surface rights. This is the nub of the multiple use principle. There is no award of compensation by the tribunal to the claim holder should the tribunal find that it should be made to share surface rights usage." (Order On Preliminary Motion To Exclude Evidence)  It is of passing interest to note that within section 51, "The tribunal has found that it does have jurisdiction where the parties consent or are in agreement to consider payment of compensation." (MNR v. Michael Gagne & Yvon Gagne & Spruce Falls Inc.)

B. J. Barton, in "Canadian Law of Mining", of the Canadian Institute of Resource Law, 1993, page 199, was first to state that "The role of the Mining and Lands Commissioner in a section 51 hearing is to "weigh the interests of the parties in accordance with the principle of multiple use of public lands." Therefore, the application of the “multiple use principle” and the concept of “multiple use of Crown lands” in relation to this case requires examination.

 

Part Two: Intended Use For Staking a Mining Claim

The Mining Act states that the lease of mining rights and, where applicable, surface rights, can only be used for mining purposes. [s.85]  However, staked claims are to be used as “mining land” or for another purpose of the “mineral industry.” [s.54 (1)]

Canada Chrome's recorded intent is to use these contiguous staked mining claims for multiple purposes specific to the “mineral industry” and has followed all mineral claim provisions of the Mining Act to pursue claim to lease;

  • To complete the $15 million engineering survey and soil testing programs to locate and then construct a requisite mine railroad to transport a precious mineral, chromium, from a mine deposit located in the Ring of Fire to a southern market distribution point at Exton, Ontario. The MNDM has confirmed acceptance for filing $7.5 million of geotechnical data as assessment work completed on the claims constituting the transportation corridor. Without the use of the land on these staked mining claims for an ore transport corridor, the proposed chromite deposits remain uneconomic to develop. The route is considered essential for it's mining purposes.
  • Locate and secure scarce local consolidated aggregate required for railway embankments. The mine transportation route choices are extremely limited by topography, as the swamps and marsh lowlands of the James Bay largely surround the mine area. 
  • Debut Diamonds, CCC's sister company, uses it's geochemical analysis of the nearly 6,000 soil samples from 811 borings recovered at 500 meter intervals along the entire length of the CCC claims to examine Kimberlite Indicators Minerals, (KIM's) to help identify distant diamond mineral deposit types. Debut holds 85 unpatented mining claims consisting of 436 total active claim units along the proposed mine railway ore transport corridor.

On August 10, 2012, the Ontario’s Ministry of Northern Development and Mines, MNDM, advised Noront Resources in writing that Ontario was in early stage discussions with Cliffs Natural Resources regarding it's intent to contribute financially to develop a north – south all-season private industrial ore haul road, subject to various environmental, regulatory and financial approvals, that would connect the Ring of Fire to existing provincial infrastructure.  The MNDM wrote that their "current expectation was that the all-season road would be made available for use by industrial users other than Cliffs, with access fees generally based on proportional road usage, although specific terms are still to be determined.”

Cliffs Natural Resources also proposes to use chromite concentrate transport trucks which exceed the maximum allowable Canadian gross vehicle weight on public roads and therefore these trucks are restricted to operation on private property only. Neither the applicant nor the Ministry of Natural Resources can successfully argue that Canada Chrome intends to use these contiguous staked mining claims for purposes "other than" for mining purposes. For how could that be, since the applicant also proposes to use these very same claims for the purpose of the mineral industry, the use of a vital private road to haul chromite concentrate mineralization to market?

Further, the Ministry of Natural Resources, in it's "ARA Guiding Principles policy no. A.R. 5.00.06" on Mining Act, Claims and Leases, gives an example of an allowable intention for staking a mining claim (subject to the provisions of the Mining Act) which does not necessarily include the recovery of minerals beneath it's boundaries yet can be defined as for the purpose of the “mineral industry.”, i.e., temporary "protection from competing interests".  Minerals are all naturally occurring metallic and some non-metallic minerals while aggregate includes gravel, sand, clay, earth, but does not include metallic ores.

"The issuance of a licence/aggregate permit is not dependent upon an individual acquiring the mining rights under the Mining Act. However, there are advantages to staking the land, as it provides protection from competing interests while an application under the ARA is being prepared and/or would allow exploration activities to be undertaken (subject to the provisions of the Mining Act)." (ARA Guiding Principles policy no. A.R. 5.00.06)

Once the easement proceedings have concluded, Canada Chrome Corporation will re-file applications according to Aggregate Resources Provincial Standards with the Ministry of Natural Resources (MNR) for aggregate permits at sites that are located within the mineral claims covering the company’s 308 kilometre-long railroad right-of-way. 

Under subsection 175 (1), where required for or in connection with the proper working of a mine, the Commissioner may make an order that gives an owner of a mining claim a variety of rights; rights of way or passage through or over any land or water, and the right to construct, improve, maintain and use suitable roads, tramways, aerial tramways, channels, waterways, passages and other means of transit and transportation upon, through or over any land or water, together with such other rights of entry upon and use of land and water as may be necessary or convenient therefor; [s.175(f)] Surface rights may be sold or granted to a mining operation if the surface rights are necessary for the carrying out of mining operations. The Minister will determine the scope of the surface right so granted. [s.39(2)].

In January, 2012, the MNR advised Cliffs that it would have to obtain the consent of Canadian Chromite to any disposition “to enable MNR to grant an easement over [the] lands”, as holders of the affected unpatented mining claims. Also, the Office of the Provincial Mining Recorder, of the Ministry of Northern Development and Mines (MNDM) was notified concerning the application to “ensure the priority to the surface rights for this application under the Public Lands Act, subject to any existing rights (e.g. unpatented mining claims in good standing).”

Since this case is a referral by the Minister of Northern Development and Mines to the OMLC tribunal pursuant to subsection 51(4) of the Mining Act, of an application under the Public Lands Act, the understanding of the scope of a section 51 hearing is necessary.

 

Part One: Priority of Rights: "First-Come" Basis

An underlying principle in both the Mining Act and Aggregate Resource Act is that rights, patents, leases, licences or other instruments of title are granted on a "first-come priority" basis.

Except where the Mining Act otherwise expressly provides, section 63 states that the "priority of recording" prevails. In subsection 44.(2), regarding the staking of claims, it is the "priority of completion of staking" that prevails. Under the surface rights compensation subsection 79.(8), the Commissioner "shall take into account which of the rights was applied for first and, except where injustice would result, shall give the holder of those rights due priority in the consideration of the dispute between the parties."

In subsection 28.(3) of the Mining Act, an application accepted under the Public Lands Act or any other Act, the application shall have priority over any mining claim staked "during" the time that the application is pending. However, in the easement case of "2274659 Ontario Inc. v Canada Chrome Corporation", the respondent's unpatented mining claims were recorded "before" the Crown's Order No. W-TB-172/11, dated January 17, 2012, which withdrew all surface and mining rights to make way for the applicant's Transload Facility and Transportation Corridor. Canada Chrome Corporation's staked mining claims take priority over the Crown's application for withdrawal.

Non-observance of this fundamental "first-come priority" principle by the tribunal would allow the Crown to effect an expropriation from a minority joint-venturer, the respondent, in order to prefer the exclusive interest of the majority joint-venturer, the applicant.

Further, under the Aggregate Resources Act, the right to consolidated aggregate is granted on a first-come priority basis (i.e. "receipt" or "acceptance" by the MNR of an aggregate permit application vs. staked mining claim). It is a question of timing as to which instrument takes precedence. (ARA Guiding Principles policy no. A.R. 5.00.06) The respondent's staked mining claims were registered previous to the Ministry of Natural Resource's "receipt" or "acceptance" date of the Cliffs Natural Resource's applications for aggregate permits along the Transportation Corridor, should the area covered by the aggregate permit applications and mining claims overlap.

If a mining claim is staked and/or recorded before an application for an aggregate permit or licence is received for the same land, then an aggregate permit will be issued only to the recorded holder(s).  The former instrument, CCC's staked mining claims, have priority in the consideration for aggregate right permits by the MNR  under the Aggregate Resource Act.