The provincial government is vowing to crack down on dead-staking, a practice where online speculators buy up mineral rights to vast tracts of land to flip for resale - with no intention of ever exploring for minerals.
"When some guy can sit in his living room and stake B.C. claims for 40 cents a hectare, online staking is too easy," said Randy Hawes, the province's Minister of State for Mining.
Mr. Hawes says changes are coming to the government's Mineral Titles Online - an Internet-based "electronic mineral titles administration system" launched in January, 2005, as part of a B.C. Liberal plan to simplify regulatory processes for the mining industry. The fixes to the system are now being spurred by government concerns that the economic benefits of mining are being curtailed by dead-stakers tying up potentially valuable mineral deposits.
The fees for staking a claim haven't changed in 30 years, and that low cost - along with the ease of the online system - has attracted speculators. Once a speculator has dead-staked a claim, he can later use the system to transfer interest in a claim to another party for profit.
"A producing mine provides long-term high-paying jobs and provides significant spinoff benefits in the communities near the mine location," said Jake Jacobs, spokesman for the Ministry of Energy, Mines and Petroleum Resources. "Where land is held by a mineral claim that is not being adequately explored, the province loses the potential of finding a mine. The land is sterilized from legitimate exploration."
Mr. Hawes said the current $0.40-per-hectare fee paid online for a new claim will probably go up, and the failure to perform and register work done on a claim site by an annual expiry date could lead to an automatic forfeit of the claim.
The B.C. Mineral Titles Branch is investigating the amount of land held by dead-stakers and has begun monitoring existing titles to ensure they are being actively explored. Mr. Jacobs would not say how much land is inactive, but noted that the use of the online system has been very brisk: The number of hectares claimed online jumped from 8.9 million to nearly 13 million between December, 2005, and December, 2009.
Even before the dead-staking issue came to light, the online staking system invited controversy: In 2005, a little-known gravel/aggregate mining company filed online claims to nearly 20,000 hectares of the Sunshine Coast's southern Sechelt Peninsula - a chunk of land that included Premier Gordon Campbell's waterfront recreational property at Halfmoon Bay.
In the past, miners intent on claiming mineral rights would have to visit a site and physically mark the claim, followed by a visit to a provincial mineral title office to register the claim. But that all changed with the click of a mouse in 2005, and Jonathan Buchanan, a spokesman for the Association for Mineral Exploration B.C., says the online system has done a lot of good for legitimate miners. Not only has the system reduced the expense and work of acquiring mineral tenures, he says, but the ability to register a claim in real time has minimized disputes between rival companies competing for mineral prospects.
According to the government's Mineral Titles Online homepage, the system enables a user to select claim tenures for acquisition, maintain claims by registering exploration and development work, and transfer interest in mineral titles to other "free miners." To acquire a new title, a user must hold a free miner certificate - which is available to Canadian citizens, non-residents registered by the federal government to work in Canada, and certain registered companies and partnerships.
Mr. Hawes says the government will consult with the mining industry before it determines what changes will be made, with legislation to be ready by spring of 2011.
Special to The Globe and Mail