Let’s amend the Quartz Mining Act

Let's amend the Quartz Mining Act Amidst the current "mining boom" within the territory, there has been a considerable amount of concern raised by Yukon residents about how our mineral resources are being extracted, the quality of oversight conducted by

Amidst the current “mining boom” within the territory, there has been a considerable amount of concern raised by Yukon residents about how our mineral resources are being extracted, the quality of oversight conducted by the regulatory regime and the efficacy of remediation efforts by mining operations.

The current territorial Quartz Mining Act was originally created to address the hard rock mining industry after the historic gold rush. Since that time, not much has changed.

During the recent territorial election, concern was raised over the current royalties paid out to the territory from the capital generated by mining companies. The majority of the letter submissions to the newspaper revolved around the requests to amend the current royalty rates of 37.5 cents for every ounce of mineral extracted. This royalty is specific to the Placer Mining Act and this rate does not apply to hard rock royalty rates.

The current Quartz Mining Act does have higher percentile rates on the annual royalty payments required from the mining operations. They came into effect in May 2010.

On the other hand, the amendment also brought about the change that companies are able to write off eligible capital costs that are deductible as depreciation allowance, at the rate of 15 per cent, until the original capital cost of the asset is fully claimed. A depreciation asset means tangible property, other than land, used in the operation of a mine and having an original capital cost of over $10,000 and an expected useful life of more than one year.

Additionally, these deductions extend to any of the pre-production capital costs and development expenses which may be carried forward throughout the life-span of the mine (or until these costs have been fully deducted).

Currently, there is no definitive clause within our legislation, which elaborates on what a deductible operating cost is. Rather than bolstering our own economy through the companies mining “our resources” out of the ground, we are allowing corporations from outside the Yukon to continue funneling funds back into their companies and distributing substantial dividends to their shareholders.

The Yukon is on the fast track of a boom-and-bust economy with no regard to future generations of the territory.

The current lease period for a minesite is 21 years at a low cost of approximately $100. This is a long time frame, which poses far too great a risk for unnoticed, irreversible environmental impacts to occur. The fees associated with the lease of these claims do not significantly convey the responsibilities that should beset upon the leaser of the claim.

A tract of land may be leased as a mill-site to process the ore. According to the act, the definition of a mill-site is “a plot of ground leased under section 119 for the purpose of erecting on the plot any machinery or other works for transporting, crushing, reducing, or sampling ores or for the transmission of power for working mines.”

The size of a mill-site is limited to five acres but there is no specification within the act as to how many “mill sites” may be used for any mining operation. How much does it currently cost to lease a mill-site? The insignificant rate of $1 an acre (per annum), which is payable yearly in advance from the date of application for the lease. I am sure an advanced payment of this magnitude will leave many companies hard pressed to dish out a Christmas bonus.

To make amendments for these prehistoric sections within the Quartz Mining Act would go a long ways in helping to clarify my definition of “sustainable development” within the territory.

We have a significant amount of mineral deposits right under our feet. Rather than catering to the needs of outside mining companies by exercising low standards for mining operations, we could have them conforming to our high-standard regulations and ensuring that our backyard is not compromised for a quick buck.

The fact of the matter is that mineral-starved countries will, ultimately, pay any price to acquire the resource.

Let’s establish a standard, limit the amount of annual mineral extraction and the dividends from this effort will keep flowing into the territory for many years to come!

Ray Sabo

Whitehorse