Why Should You Esta blish a Development Policy?

Development of a non-renewable resource, such as metallic minerals, or even the consideration of development, is easier with a community development policy already in place. It gives your community the guidelines for investigating resource development; it provides for informed decisions on whether to proceed; and it helps maintain a focus on the priorities of your community for investment of both time and money.

A development policy not only provides direction in dealing with the unexpected, it is its own road map, guiding those who will be implementing it on behalf of your community.

The need for a policy begins with your community's decision to pursue economic development. It helps to establish:

• the terms, conditions and limits of development;

• the extent to which economic development is a community priority;

• which development opportunities to study first;

• how to reconcile economic interests with environmental, social, cultural and traditional ones; and

• land-use plans.

When a mineral opportunity arises, be ready to act. With a policy already in place to guide you, you are prepared for each stage of investigation, exploration and actual development. A policy supported by the community will allow you to give a clear message to the potential mining developer.

A written policy, prepared in advance, is best, rather than a verbal one. There is much less chance for misunderstanding later on.

The second important point about a community development policy, probably the most important, is that it should be built through community participation. If your band members have been consulted on its formation, they are more likely to approve and support it.

About Metallic Minerals and Your Community Development Policy

The following table lists many of the metallic minerals produced in Canada. Some, such as platinum and molybdenum, are extremely rare but others, such as nickel and iron ore, are plentiful. They are used in a variety of manufactured products.

Is the development of metallic minerals an option for your community? Consider the following questions.

• Does your reserve have mineral deposits to develop?

• In your region, what are the regulatory and legal issues with regard to metallic minerals?

• As a First Nation are you willing to surrender metallic mineral rights to Her Majesty and necessary surface rights as a prerequisite for exploration and development? (See the later section "Understanding the Regulatory Process" for an explanation of the surrender process.)

• After initial exploration, and after you have looked at the benefits and costs, will you want to continue development?

Does Your Reserve Have Mineral Deposits to Develop?

Canada has five basic geological regions, each with particular types of mineral deposits and varying degrees of mineral activity. Which region your reserve is in determines the probability of finding metallic minerals.

• The Precambrian Shield extends across the Hudson Bay area and throughout central Canada. One of the most productive mining regions in the world, the Shield yields everything from iron ore to gold and base metals.

• The Interior Plains region, west of the Precambrian Shield, is, for the most part, unfavourable for metallic minerals.

• The mountainous Cordilleran Region of western Canada contains large deposits of base metals and gold and accounts for half of all mining and exploration in Canada.

• In Atlantic Canada, the Appalachian Region has one of the largest zinc deposits in Canada, the only significant tin deposit in North America, as well as other base and precious metal deposits.

• The Arctic Region, which includes all of Canada's high Arctic, has rich deposits of metallic minerals.

_{The five basic geological regions of Canada _ _ which region your reserve is in determines the likelihood of finding metallic minerals.}

As a starting point for your research, check your reserve's potential for metallic minerals in DIAND's inventory report, Mineral Resource Potential on Indian Reserve Lands. Keep in mind that a low rating does not necessarily rule out mineral development, nor does a positive rating guarantee it. Look at previous studies of your reserve as well; DIAND regional offices have copies.

Talk with other First Nation communities. Many Aboriginal people have taken prospecting courses, explored for minerals or have worked in the mining industry.

Past and current exploration and mining activities on lands near your reserve can be an indication of mineral potential on your lands. They are worth investigating.

Inquiries from the mining industry about access to First Nation lands can indicate interest by developers. Often, companies and prospectors working on nearby off-reserve lands will inquire about access to reserve lands. These inquiries, or their absence, are another indicator of on-reserve potential.

Provincial governments keep records of the results of private-sector mining activity and of past geological exploration. They often have a good overview of opportunities for development in your area.

You can get geological maps, reports and other informative materials from provincial government offices serving the natural resource and environment sectors, and from the Geological Survey of Canada of Natural Resources Canada which has offices in most major cities. Some bookstores as well as public and university libraries carry government publications including geological and other mineral reports.

In Your Region, What Are the Regulatory and Legal Issues With Regard to Metallic Minerals?

Reserve lands are federal Crown lands set aside by law "for the use and benefit of a band." However, this does not necessarily include minerals. Ownership of minerals, or mineral rights, differs from one reserve to another, and from region to region.

First of all, unless otherwise stated, minerals are owned by either the federal or provincial Crowns. If this is not the case for your reserve, it will say so in the Privy Council Order which established your reserve. Ownership of mineral rights may also be determined by other legislation and treaties.

First Nations have significant control of exploration and development of minerals on their lands within the terms of the Indian Act, DIAND policy and other legislation.

Areas in which First Nations are entitled to full economic benefit from metallic minerals on their reserves under the Indian Act are:

• Reserves created before 1930 in Alberta, Saskatchewan and Manitoba;

• Yukon and the Northwest Territories.

Regions where there are specific controls or factors in addition to the Indian Act are:

• British Columbia;

• Reserves created after 1930 in Alberta, Saskatchewan and Manitoba under the Natural Resources Transfer Agreement (Constitution Act, 1930);

• Ontario;

• Quebec (where the province claims mineral rights);

• Nova Scotia;

• New Brunswick;

• Newfoundland; and

• Prince Edward Island.

DIAND regional offices can give you the particular details affecting your reserve.

Even if you do not hold the rights to metallic minerals underlying your reserve, the surface of the land is still under your authority. This gives you control over most development.

Note too that First Nation rights to minerals can be changed through federal-provincial/territorial negotiation. If it appears that a potential change might improve your rights, you could hold off on mineral development until such change has occurred. In Quebec, where there is no agreement between the federal and provincial governments, bands may negotiate directly with the province.

The Question of Surrendering Metallic Mineral Rights as a Prerequisite for Development

The Indian Act requires that a First Nation surrender to Her Majesty any rights to metallic minerals underlying a reserve, if development is to take place. (See the later sections "Understanding the Regulatory Process" and "The Implications of Metallic Mineral Development," for more information on this issue.)

Look at the Benefits and Costs of Metallic Mineral Development

Before you make any decisions, consider the advantages and disadvantages of mineral development for your reserve. It takes place in four stages.

• Exploration:

• Development:

• Production:

• Mine rehabilitation:

Benefits and costs depend on the extent of your involvement and at what stages. There is a misconception that the only way to obtain benefits from minerals is to mine them. In fact, mines are rare _ _ maybe one in every 2,000 mineral occurrences ends up as a producing mine. But the exploration stage can bring its own economic benefits, the most obvious being jobs and training for individual First Nations people on the reserve which is being explored.

Benefits

In 1990, between $750 and $850 million was invested in mineral exploration in Canada. These dollars were spent on salaries, equipment, surveys, drilling, transportation, map making, laboratory analyses and hundreds of other activities for the purposes of finding minerals.

When the exploration takes place on a reserve, the First Nation can share in the benefits. Besides employment and training, other direct and indirect benefits include:

• bonus payments or royalty prepayments which are paid regardless of whether exploration or mining occurs;
• machinery rentals and heavy equipment maintenance;
• transportation and hauling;
• new roads, bridges or other construction;
• accommodation;
• catering; and
• retail sales.

If the exploration does result in the discovery of an economically viable mineral deposit, your community could expect the following benefits.

• The sale of minerals produces royalty income, the amount of which depends on:
  - the volume of processed minerals produced;

  - the royalty rate you negotiate with the project developer. The rate would reflect prices, volumes and the developer's ability to pay; and

  - your right as a First Nation to royalty income. Depending on the federal-provincial ownership agreement in place, your royalty could range from none at all to 100 percent.

• Surface rents are paid to a First Nation for the use of the reserve land surface for the mine and access roads. Rents are calculated according to the local market values of land and the size of the area needed for the mining operation. It is of mutual benefit to you and the developer to negotiate fair rents because overly high rents add to the mine operator's costs and reduce profitability. This in turn will affect the First Nation's financial benefits. Paid on a per hectare basis, rents at the moment range from $5 to more than $300 per hectare. Surface rights may have to be designated for the duration of the project.

Royalties and rents are paid to the Receiver General for Canada and deposited into the First Nation's trust accounts. Royalties are paid into your Capital account and rents into the Revenue account.

• Employment and training opportunities could result for band members in professional areas such as business, land management, geology, engineering and other related fields. For skilled workers, there could be opportunities in mining and heavy equipment operations.
• Other direct income might be tax revenues. As a First Nation, you have the authority to pass by-laws to impose taxes under section 87 of the Indian Act.
• Infrastructure benefits could include new road construction, access to electric power sources and access to services brought in to the mine.

Associated Costs

The environmental impacts associated with mining can be significant. Exploration usually includes temporary drilling programs, construction of access roads for heavy equipment and noise and pollution caused by heavy machinery and vehicles. At the development stage, the impact on the environment is generally greater than at the exploration stage; the degree of impact depends on the type of mining.

In open pit methods, environmental problems could include:

• the removal of large amounts of soil and rock;
• pollution of ground and surface water;
• noise;
• erosion during operations and after rehabilitation;
• land use conflicts;
• deterioration of permafrost;
• destruction of trees, vegetation, habitat for wildlife and fish, and other unique physical features;
• deterioration of the attractiveness of surroundings;
• the risk of injury and accident;
• health and safety of workers;
• heavy truck traffic;
• dust; and
• damage to community roads.

Other than the surface elements of underground mining, such as the shaft, mill, tailing pond and waste material, deep mining is less destructive to the environment.

Even though a mine doesn't generally use a lot of land, large-scale mining produces waste material both from the mine itself, in the form of unwanted rock, and from the milling and concentrating processes. In some cases millions of tonnes of waste are produced over the life of a mine. When the mineral deposit is depleted, whatever waste cannot be returned underground or put back in the open pit is usually left on the surface to be dealt with during the rehabilitation phase.

When exposed to air and water, some rocks and minerals may release natural chemicals, such as arsenic and sulphur. When rain water combines with the chemicals, the result is a process called "acid mine drainage." A major environmental problem in the past for mine sites and surrounding land, these discharges can now be controlled by new technological methods.

The easier access into the reserve provided by new roads can increase the problem of trespassers or provide your community with improved access to previously inaccessible areas.

Summarize Your Findings

It is not easy to assess the benefits and problems associated with mineral exploration and development. You might consent to exploration on your reserve because it generates some benefits at relatively little environmental cost. But you might not like the environmental costs of the development stage. The construction and operation of a mine may bring greater financial benefits, but at what price? Some First Nations feel that the environmental and social impacts are not worth it. However, if you agree to exploration, be prepared for development if a deposit is found.

If you have confirmed that your reserve has mineral potential, consider two issues. Is your community willing to surrender its mineral rights to Her Majesty? Are the benefits of exploration and mining on your land greater than the potential environmental risks?

If the answer is no to both questions, then put the idea aside. You have not wasted your time in looking at the possibilities of mineral development on your reserve. Rather, you may have saved a great deal of time and money by eliminating the option at the beginning rather than attempting to abandon it somewhere in the middle of the process later on.

It is still a good idea to record the location of your on-reserve mineral deposits on land use plans. By ensuring that nothing is built over them and that the land is not allocated for other purposes, you are keeping your options open for future development.

If the answer is yes to both questions, add metallic minerals as a resource to be included in your development policy. The groundwork is done. Now for the specifics.

Activities related to exploration for metallic minerals are expensive and require a certain level of technical knowledge.

Mining companies are in the business of finding new deposits. Their expertise and access to funding are the resources used to search for evidence of a metallic mineral from the basic exploration stage through to mine development.

Often, First Nations do not have access to the large amount of funding necessary for exploratory activities: preliminary diamond drilling, geophysics and geochemical surveys.

Your community may decide to conduct preliminary exploration work, sufficient to attract a mining company. Favourable results from the exploration would give you an advantage in negotiating an agreement with a mining company _ _ one in which you could increase and specify the benefits to your community.

Even so, it is the First Nation's responsibility to be informed and to understand all aspects of the process, especially the issues surrounding mineral rights, environmental impacts and the implications of the various stages of the metallic mineral activity. It is highly advisable for First Nations to seek professional advice before carrying out expensive exploration.

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