On July 30, 2014, the Ontario Superior Court granted an appeal to a subsidiary of Cliffs Natural Resources Inc. (“Cliffs”), setting aside a decision made by the Ontario Mining and Lands Commissioner (“MLC”). The appeal concerned a request for an order to dispense with consent, pursuant to s. 51 of the Mining Act (Ontario) (the “Act”), for an application by Cliffs for an easement under s. 21 of the Public Lands Act. The easement would allow Cliffs to build a road to its chromite deposits in the “Ring of Fire” in northern Ontario. The proposed road would pass over Crown land containing unpatented mining claims held by Canada Chrome Corporation (“CCC”), a subsidiary of KWG Resources Inc. Section 51 of the Act requires that an applicant obtain the consent of a claim holder in order to acquire an surface rights over Crown land. CCC refused to consent to the easement on the grounds that Cliffs’ proposed road would undermine its priority to the surface rights and interfere with its plans to build a railway on the same land.

The appeal was granted on the basis that the MLC decision gave unreasonable interpretation to ss. 50 and 51 of the Act. The MLC specifically erred in ruling that s. 50(2) of the Act does not apply to unpatented mining claims on Crown land. Consequently, its interpretation of s. 51(1) of the Act granted CCC unreasonably broader surface rights than those attributed to unpatented mining claims holders in s. 50(2) of the Act.

Section 50(2) of the Act gives claims holders the right to enter, use and occupy the surface, but only for the purposes of prospecting and development. By discounting this provision, the Court held that the MLC failed to consider the restrictive nature of unpatented claims holders’ surface rights. That led the MLC to examine the conflicting priorities of CCC and Cliff’s proposed uses of the surface land. This interpretation was inappropriate as CCC did not have the legitimate right to use the surface for any purpose other than exploration or development of a mine.

Additionally, the Court found that the MLC erred in its interpretation of s. 51(4) of the Act, which gives the MLC authority to dispense with consent. The MLC’s interpretation of this provision had two flaws. Firstly, it was incorrect to require Cliffs to prove that its proposed use of the land was in the public interest. Secondly, the MLC was wrong to suggest that having a minimal impact on the claim holder’s rights is sufficient to reject the order. Such an interpretation is inconsistent with MLC jurisprudence and offends the legislature’s intention that mining lands employ multiple uses whenever possible.

The Court also found that the MLC’s analysis did not properly engage the evidence before it. The appeal suggested that the MLC should have reviewed CCC’s proposed mining exploration against any evidence of actual or probable impact that Cliffs’ proposed road would have on those activities. Pursuant to s. 133 of the Act, the Court not only granted the appeal, but ordered that consent be dispensed with. CCC has already served notice of its intent to challenge the appeal decision. Should the Court’s order stand, Cliffs may proceed with its application for an easement, which still includes environmental assessment and consultation with other interested parties, such as First Nations.

Ultimately the decision of whether Cliffs’ easement will be granted rests with the Minister of Natural Resources. The process is ongoing, giving CCC many further opportunities to oppose the application for easement based on the legitimate protection of its mining claims.