What does Ontario’s buy out of God’s Lake really mean?

In the aftermath of Ontario’s decision to buy out the mining claims of God’s Lake Resources for $3.5 million, NDP MPP Sarah Campbell came up with one of the occasion’s more memorable quotes.
“Ontario may be the only province in Canada where you can make a substantial profit in mining without having to break ground,” Campbell said.
Forget her obvious political bias, and the fact that Campbell was looking to score points off a political hot potato that the Liberals were forced to deal with.
What Campbell pointed out – that a mining company had been able to make a substantial profit without breaking ground – may be the most long-lasting and harmful precedent to come out of the whole ordeal.
Since Ontario’s decision to pay GLR to give up its claims, a number of mining industry pundits have expressed concerns that because of the decision, First Nations will be increasingly emboldened to oppose development on traditional lands.
Fasken Martineau DuMoulin lawyer Neal Smitheman told Mining News Weekly that it seemed Ontario had “capitulated” to KI’s demands. A different mining industry source, who remained unnamed, told the same reporter that it is going to be “a wild west out there, when it comes to mining companies that have a bounty on their head.”
But those kinds of comments miss the point. KI was not the one who profited from its battle with GLR. The First Nation spent months of its own time and resources dealing with the controversy, and in the end its only victory was a retreat to the way things were before GLR showed up on its lands, uninvited and unannounced.
Meanwhile the company walked away from the Sherman Lake claims – its only mining claim – with $3.5 million, despite having done limited exploration work. The odds are good that GLR made a sizeable profit in the deal with Ontario.
The real worry with the outcome of the KI – GLR conflict is not that First Nations will start opposing more projects. Some First Nation opposition is inevitable when the current system continues to grant leases on traditional lands before any consultation work is done.
The real worry with Ontario’s buy out of GLR is that small, rogue mining companies start to consider claim-staking a profitable exercise in and of itself.
If conflicts between small companies and First Nations over mining claims continue to result in multi-million dollar payouts to the company in question, the economics of those conflicts start to look pretty good.
That really would make northern Ontario start to look like the wild west.
And meanwhile all the good, hard work on consultation and development with First Nations done by the many responsible mining companies working across the North would go out the window.
The implications for the entire Ontario mining sector of Ontario’s buy out of GLR are vast.
The mining industry pundits who worry about conflict are right, in a way. But it is not First Nations who will lead future conflicts. Irresponsible mining companies are much more likely to spark a fire.
That is what the Ontario government should be concerned about.
That is why phase two of the new Ontario Mining Act, set to be implemented later this year, has to get it right.
Ontario cannot continue to leave the responsibility for consultation of First Nations in the hands of industry. It has to take its own responsibility to consult and accommodate seriously. It has to put a consultation framework in place that clearly sets out obligations and responsibilities. And it has to start consulting with First Nations prior to granting leases to industry on traditional lands.
Otherwise, conflicts like the one between KI and GLR will keep on happening.
And that is going to get expensive for everyone involved.