Malartic gold mine class-action lawsuit trial begins

A class-action lawsuit brought forward by residents allegedly affected by the Malartic gold mine, owned and operated in a 50:50 joint venture by Agnico Eagle Mines (TSX, NYSE:AEM) and Yamana Gold (TSX:YRI) (NYSE:AUY), is going before the Quebec Superior Court today.

The residents living close to the large open pit mine, located 25 km west of Val d’Or in Quebec’s Abitibi region, want to be compensated for damages related to dust, noise and explosions they claim to have been exposed to for many years.

The suit, filed last year, was approved by the same court in May. The decision came on the heels of the Quebec government allowing the Malartic gold mine expansion, a project that will increase its life span by six years, until 2028.

At the time, the provincial government said the two companies involved in the Malartic mine worked with the local community to ensure the project was “well understood” and “in line with the strategic vision for mineral development.” It did, however, included nine new conditions, five of which related to climate management.

About 1,200 people living close to the large open pit mine in Quebec’s Abitibi region, want to be compensated for damages related to dust, noise and explosions they claim to have been exposed to for many years.

Ugo Lapointe, Program Coordinator for MiningWatch Canada, said an independent expert panel that reviewed the project last year recommended a “mediation process” to resolve the conflict.

It also suggested, he said, that the companies review their compensation and relocation protocol to specifically address the community members’ concerns, including the need to be able to relocate in a neighbouring community without incurring debts, costs, or losses in the process.

"Currently, the companies’ lawyers are doing everything they can to prolong and delay the process instead of moving ahead swiftly," Lapointe told MINING.com.

But Canadian Malartic says that's not true. "Contrary to Mr. Lapointe’s statement, Canadian Malartic’s counsel have been in Court not to 'prolong and delay the process' but rather to defend the right of Canadian Malartic’s residents to continue benefiting from the compensation program, as against Plaintiff/Class representative’s efforts to prevent the 83% of class members who have chosen to benefit from the Guide and receive their compensation, to continue doing so," it said in an emailed statement.

The mine's representative added that, since September 2016, Canadian Malartic has a voluntary compensation process in place. The "Good Neighbour Guide" outlines the terms and conditions under which residents could be compensated for annoyances caused by dust, vibrations, overpressure and noise, she said.

Reports show a $40,000 to $70,000 price difference between houses located close to the mine site and similar properties in neighbouring communities.

But the Quebec Superior Court excluded the possibility of landowners claiming real-estate losses in the class-action suit. Those claims must be done on an individual basis, the judge ruled.

A report published last year by Quebec’s environmental regulation agency (BAPE) concluded that the province’s environmental laws are inadequate to regulate the operation of an open pit mine such as that of Canadian Malartic. Likewise, the BAPE believes that government did not use “the coercive means” at its disposal to enforce current regulations.

According to that document, since 2011, the companies operating Malartic have been unable to demonstrate the mine can be run in an urban environment in accordance with the legal requirements imposed on it.

The report found the mine frequently exceeded the standards and criteria for noise, dust and vibrations, which resulted in recurring notices of noncompliance issued.

The class action covers an area that includes about 350 homes and apartment buildings (about 1,200 people), all located within 800 metres of the pit. The closest homes are 100 metres away from the operation, which runs round the clock, 365 days a year.

The Malartic mine has been operating since 2011. Agnico Eagle Mines and Yamana Gold Inc. acquired it in 2014, in a $3.9-billion takeover of Osisko Mining Corp.