ppt presentation to mistissini mining symposium of june 1, 2011...

PRESENTATION ONTHE CREE NATION MINING POLICY

to Mistissini Mining Symposium

Abel Bosum, Cree-Quebec NegotiatorJune 1, 2011

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Introduction

► Why a Cree Nation Mining Policy ?

Cree position in response to Quebec’s Mineral Strategy, issued on June 29, 2009, entitled ““Preparing the Future of Québec’s Mineral Sector”.

Need for guidelines on mining exploration and activities taking place in Eeyou Istchee.

► The Cree Nation Mining Policy is composed of three (3) parts:

(1) Part I – Guiding Principles;

(2) Part II – Guidelines to a Cree Integrated Approach to Mining;

(3) Part III – Guidelines on Financial and Other Benefits.

► Part I of the Cree Nation Mining Policy is intended for public distribution, while Parts II and III of the Cree Nation Mining Policy are intended for Cree consumption only.

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Cree Nation Mining Policy – Part 1


► Approved by the Council Board in December 2009;

► Support and promotion of the development of mineral resources inEeyou Istchee;

► Standardized, consistent and effective approach for Cree involvement in all mining related activities;

► Presentation of Cree Governance (GCCEI, CRA, Cree communities, JBNQA, Paix des Braves, Federal NRA).

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Guiding Principles

� Support and promotion of the development of mineral resources within the territory of Eeyou Istchee;

� Must provide long term social and economic benefits for the Cree;

� Must address sustainable development within the larger context of natural resources management and the environmental and social protection regime in the Territory.

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Based on three (3) pillars

� Promotion and Support of Mining Activities;

� Mining and Sustainable Practices;

� Transparency and Collaboration.

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Pillar 1 – Promotion and Support of Mining Activitie s

� Ensuring the protection of rights, interests and benefits of all Crees, collectively over their lands and resources;

� Acknowledging and endorsing the principles of allocation and acquisition of mineral rights and the corollary right to develop the mineral resources, while prioritizing Cree rights and addressing Cree environmental and social concerns;

� Recognizing Cree contribution to mining projects: guidance from the Crees based on their traditional, technical and scientific expertise on land and mineral resources.

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Pillar 2 – Mining and Sustainable Practices

� Sustainable development of the Eeyou Istchee, in accordance with the principles derived from the Eenou Astchee – Eenou Estchee Natural Resources Declaration issued in 1995;

� Sustainable mining initiatives within the national and international mining industry standards;

� Environmental and Social Protection Regime of the JBNQA and mining agreements principles under Chapter 5 of the Paix des Braves.

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Pillar 3 – Transparency and Collaboration

� Direct relationship between mining proponents and Cree entities and communities;

� Collaborative and flexible approaches and shared-decision making processes;

� Support to the mining community through the Cree Mineral Exploration Board;

� Mining proponent to work with the local Cree families, including the tallymen, and Cree entrepreneurs.

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► Part II of the Cree Nation Mining Policy, entitled “Guidelines to a Cree Integrated Approach to Mining” was the subject of input from Council Board members and approved in December 2010. It sets out:

(a) the role and responsibilities of Cree entities in the context of mining activities and how Cree entities (GCCEI-CRA, Cree local governments, CMEB, Cree School Board, CHRD, CBHSSJB, etc.) interact with eachother, for the purposes of a standardized approach to mining development in Eeyou Istchee;

(b) strategic orientations, based on the various phases of a mining project (exploration, pre-development, commercial production, closure); and

(c) application of JBNQA regimes (Section 5 – Land Regime, Section 22 –Environment and Future Developments, Section 24 – Hunting, Fishing and Trapping).

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Background

� Cree Nation;

� Cree Governance;

� JBNQA, Paix des Braves and New Relationship Agreement with Canada;

� Hunting, Fishing, Trapping and the Environment;

� Consultation with the Cree Nation.

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Family Hunting Territory System

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Roles and responsibilities of Cree Entities

� GCCEI-CRA;

� Cree local governments;

� Cree Mineral Exploration Board;

� Cree School Board and CHRD;

� Cree Board of Health and Social Services of James Bay;

� Tallymen and users of Cree Family Hunting and Trapping Territories.

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Strategic Orientations

� Pre-Development / Prospecting Phase;

� Negotiation of Impact Benefit Agreements (IBA);

� First contact for negotiations;

� Mine Closure;

� Bulk sampling.

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Application of JBNQA regimes

� Chapters 4 (Territorial Descriptions), 5 (Land Regime), 22 (Environment and Future Development Below the 55th Parallel) and 24 (Hunting,Fishing and Trapping) of the JBNQA;

� Cree involvement in environmental management during mining operations.

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Schedule A – Addresses and Telephone Numbers

� GCCEI-CRA and Cree Bands;

� Cree Trappers Association;

� Cree School Board;


� CHRD;

� CBHSSJB.

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Schedule B – Definitions

� Cree local governments;

� Cree Category IA lands, Cree Category IB lands, Cree Category II lands, Cree Category III lands;

� Cree Board of Health and Social Services of James Bay;

� Cree School Board;


� Cree Regional Authority;

� Grand Council of the Crees (Eeyou Istchee);

� James Bay and Northern Québec Agreement;

� Agreement concerning a New Relationship between the Government of Québec and the Crees of Quebec;

� Agreement Concerning a New Relationship Between Canada and the Cree of Eeyou Istchee;

� Territory.

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Schedule C – Subject Matters of an Impact and Benefi ts Agreement

� General Matters (purpose of the agreement, duration, non-derogation provisions, assignment and transfer, language, governing law, notices requirements and identity of parties);

� Description of the project;

� Consents and Undertakings;

� Employment;

� Training;

� Economic Development and Business Opportunities;

� Social, Cultural and Community Support;

� Environmental Protection.

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� Part III of the Cree Nation Mining Policy, entitled “Guidelines to Financial and Other Benefits” was also approved in December 2010 and sets out:

(a) the nature of the various benefits which can be derived from agreements with mining proponents; and

(b) the distribution of financial benefits amongst the impacted and non-impacted communities.

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Non-financial benefits

� Non-financial benefits derived from agreements with mining proponents generally include:

(a) Training and education measures (programs, measures and initiatives to promote the training and education of Crees in the mining and non-mining sectors, etc);

(b) Employment (creation of employment opportunities towards integration and advancement of Cree labour force in a mining project, employment targets at various employment levels, etc);

(c) Business opportunities (establishment of guidelines for tendering process, Cree content in bid evaluation, prior identification of Cree enterprises, single source contracts to Crees, etc);

(d) Social and cultural benefits (on and off site cultural facilities, etc);

(e) Environment Management Activities (Cree involvement in environmental management, surveillance and inspection activities).

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Financial benefits

� Financial benefits derived from agreements with mining proponents should include:

(a) An Initial Amount, payable upon execution of a final agreement between the Crees and a mining proponent. The purpose of the Initial Amount is to recover expenses incurred in the negotiations with a mining proponent;

(b) A Base Guaranteed Amount, based on the estimated value of a mining project, and not related to the varying profitability of a mining project over the years of commercial production. The purpose of the Base Guaranteed Amount is for the Crees to receive financial benefits, regardless of the success or failure of a mining project;

(c) Participation Payments, to be triggered once the company has attained an agreed rate of return. The purpose of the Participation Payments is for the Crees to receive additional financial benefits based on the success and profitability of a mining project, but not to be penalized in case of the failure of the project.

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Initial Amount

� At the outset, an Initial Amount should be negotiated between the Crees and a mining proponent to recover the expenses incurred by the Cree parties (community (or communities impacted) and GCCEI-CRA) in the course of the negotiations of an agreement with a mining proponent;

� This amount should be payable by the mining proponent upon execution of a final agreement and should be payable, even if the company decides not to approve the project, since the Crees will have incurred expenses in the course of the negotiations.

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Base Guaranteed Amount

� Determination: the Base Guaranteed Amount should be based on a set percentage of the “free cash flow” for the life of the mine. This percentage shall be negotiated between the Crees and the mining proponent.

� Time of Payment: this payment could either be paid as a lump sum at a given point in time or paid on a yearly basis throughout the life of the mine, in which case the payments would have to be adjusted to reflect the time value of money (either with an interest rate component or Consumer Price Index adjustments).

� Recipient(s): the Base Guaranteed Amount is payable in its entirety to the community (or communities) directly impacted by a mining project. Once a mining proponent has built a mine, the base guaranteed amount becomes payable even if the mining proponent later abandons the project.

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Participation Payments

� Determination: for marginal projects, there may be no participation payments since many marginal projects get approved at the threshold of a company’s base line rate of return which would likely result in no excess return being available for participation payments. Participation payments are determined in such a way as to allow a company to recover its capital expenditures on the project prior to making annual participation payments to the Crees.

� Time of Payment: participation payments are annual payments, which are triggered once the project is in commercial production and once the company has attained an agreed rate of return.

� Recipient(s): at least 50% of the annual participation payments will be allocated to the community (or communities) directly impacted, while the remaining portion would be allocated to a Cree Nation Community Fund (for the benefit of the other Cree communities).

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Summary of Model

� For Marginal projects, it is likely that only the Base Guaranteed Amount would be paid and this would be entirely payable to the impacted community or communities.

� For Mid-Scale, Significant and Word-Class projects, in addition to the Base Guaranteed Amount, participation payments could also be generated.

� As the project’s profitability increases, the participation payments would significantly increase since they would be tiered payments determined on the basis of escalating rates of return on a specific project. The higher the rate of return attained on a specific project for the mining proponent, the higher the percentage would be on the annual free cash flow for the participation payments.

� As the amount of the participation payments increases, so does the global share of the total payments which would be allocated to a Cree Nation Community Fund (for the benefit of the other Cree communities).

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This presentation on Cree Nation Mining Policy is p rovided for iThis presentation on Cree Nation Mining Policy is p rovided for i nformation purposes only and it may not be used for purposes of nformation purposes only and it may not be used for purposes of legal interpretation of the legal interpretation of the James Bay and Northern Quebec AgreementJames Bay and Northern Quebec Agreement or any other agreements and it is without prejudice to any righor any other agreements and it is without prejudice to any righ ts of the Crees.ts of the Crees.

ppt presentation to mistissini mining symposium of june 1, 2011...

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