Bennett Jones
Simon Foxcroft and Keely Cameron write in Canadian Mining Journal on what the Supreme Court of Canada's Redwater decision means for mining companies. Redwater dealt with the priority to be provided to abandonment, remediation and reclamation liabilities for wells in Alberta in the event of an insolvency—but there are similarities and likely impacts on the mining industry. These include:
- increased lender scrutiny over reclamation liability and environmental practices;
- greater hesitance on the part of lenders to fund projects without an understanding of practiced and planned environmental compliance;
- the imposition of more stringent covenants associated with credit facilities;
- a greater focus on the adequacy of bonds and security placed with regulators; and
- increased public scrutiny of the environmental impacts of mining projects.
Simon and Keely also describe the key points that companies should consider when negotiating and drafting agreements for entry into a new or updated working arrangement with a counterparty, in light of the increased pressures of Redwater.