MAC: Mines and Communities

Osc Probe Urged Of Miner's Role In Cree Land Dispute

Published by MAC on 2006-08-17

OSC probe urged of miner's role in Cree land dispute

Platinex in legal row with community

Groups seek tougher oversight of firms


17th August 2006

Four environment groups want the Ontario Securities Commission to investigate a mining company that's suing a small Cree community in Ontario's far north for $10 billion.

The groups hope their action will lead to tougher oversight when companies claim clear access to land, including consent from nearby communities, where they aim to explore for minerals. In a letter to the commission, they allege Aurora-based Platinex Inc. "breached disclosure requirements" when it assured investors it had permission to seek platinum near Kitchenuhmaykoosib Inninuwug, or KI, about 600 kilometres north of Thunder Bay.

KI actually opposed the project, based in an area it claims is part of its traditional territory.

The investigation request is based on a court judgment in the first of what is likely to be a series of legal battles between Platinex and KI.

Last winter, a Platinex contractor opened an exploration camp. KI set up a protest nearby. After a week of peaceful standoff, the contractor left.

Platinex, claiming intimidation, sued KI for $10 billion; the community countersued for $10 million. Platinex sought a ban on protests; KI asked the courts to prohibit exploration.

KI won the first legal round last month, when Mr. Justice G.P. Smith of the Ontario Superior Court issued an injunction against work by Platinex.

Smith gave the two sides, and the province, five months to resolve the matter. Talks are to proceed, although last week Platinex said it would appeal.

The struggling junior miner argued in court it faced insolvency unless it could do exploration work this summer. It had raised money by issuing flow-through shares, which offer a tax writeoff for the cost of work within the year.

Platinex is "to a large degree, the author of its own misfortune," Smith wrote. "At the time (it) became listed on the (TSX Venture Exchange) and issued a prospectus to raise funds, it knew that access to the land was a serious and real issue."

"Mining exploration companies are not adequately reporting to investors the nature and extent of opposition by communities to their activities," state the groups - MiningWatch Canada, Forest Ethics, Rainforest Action Network and Natural Resource Defence Council. "There's nobody monitoring ... so investors can't know whether access claims are accurate," Joan Kuyek, national co-ordinator of Ottawa-based MiningWatch, said yesterday.

In a separate action, KI wants the courts to throw out the province's Mining Act, which allows prospectors free entry on to almost any privately owned land.

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