Quebec miners in holding pattern as province finalizes royalty, exploration rules – by Nicolas Van Praet (National Post – November 26, 2012)

The National Post is Canada’s second largest national paper.

MONTREAL — Companies mining in Quebec are expected to ship $9.6-billion worth of minerals this year, double the amount exported only five years ago. But the boom taking hold is being complicated by political uncertainty and competing visions over just how far taxpayers should go in backing companies digging valuable resources in their midst.

Quebec’s Chambers of Commerce Federation says several companies have told its officials they are currently suspending new natural resource and mining investments in the province until the Parti Québécois government finalizes a royalties regime and further clarifies exploration rules. But even established companies tapping existing mines are experiencing growing pains and finding it’s next to impossible to build definitive societal consensus for their projects.

Two particular events illustrate the difficulty miners are having in keeping Quebecers on side.

On Monday, Osisko Mining Corp., the Montreal-based firm operating Canada’s largest open-pit gold mine in Malartic near Val D’Or, confirmed that the head of the independent citizens committee monitoring the mine through to its eventual closure quit. Bernard Gauthier’s resignation came after another member of the seven-person committee said over the weekend the entire group was poised to quit on Wednesday to protest the alleged heavy-handedness of the company in their affairs.

“We’re very surprised by this,” Osisko chief executive officer Sean Roosen said in an interview. “[It] caught us completely flat-footed to be honest … We’re going to work hard to figure out what happened here and put the wheels back on the car and get going again.”

The Malartic mine, which started commercial production in May of last year, has been a huge challenge for Osisko. The company moved an entire section of homes to another part of town to make way for the project and negotiate with holdouts who refused to budge. A fire this year at the site shut down production for 10 days while activity was impacted again in October by a delay in executing a 940,000 tonne dynamite blast that limited access to higher grade ore.

The blast eventually occurred without major incident, but it proved to be a significant flashpoint for tension in the community of 3,600. Government delays in approving the procedure forced the company to lay off about 150 temporary workers, who joined others in supporting the company’s efforts. On the other side, a minority of citizens expressed concerns that their homes would be damaged.

“It’s not easy to live in Malartic these days,” Mr. Gauthier said in an interview. “There are families that are being torn apart by this.”

For the rest of this article, please go to the National Post website: http://business.financialpost.com/2012/11/26/quebec-miners-in-holding-pattern-as-province-finalizes-royalty-exploration-rules/

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