Billion-Dollar Battle: Nova Scotia Mining Company Sues N.L. Government Over Revoked Iron Ore Permits

A high-stakes legal battle has erupted between a Nova Scotia-based mining company, East Coast Mining Ltd., and the Newfoundland and Labrador government. At the heart of the dispute are claims to a vast iron ore deposit near Stephenville, N.L., potentially worth billions of dollars, for which East Coast Mining alleges its exploration permits were unfairly and illegally revoked.

The company, based in Sheet Harbour, N.S., has filed a statement of claim in Newfoundland and Labrador Supreme Court, accusing the provincial government of unconstitutional actions, breach of contract, and causing significant financial damage.

East Coast Mining claims it held legitimate permits for over 50,000 hectares of land, an area roughly twice the size of the city of St. John's, and had already invested substantial funds in exploration efforts.

According to the lawsuit, the province initially granted East Coast Mining the exploration permits in March 2022.

However, just months later, in September of the same year, the company was abruptly informed that its mineral claims were being cancelled. The province cited 'errors' in the original permitting process, stating that the claims were actually being held for another company, Tacora Resources.

East Coast Mining contends that these 'errors' are not only unsubstantiated but that the government's actions effectively nullified their legally obtained permits.

They argue that the province failed to follow proper procedures for cancelling permits, which typically involve public notice and an opportunity to appeal, and that the revocation violates their rights under the Canadian Charter of Rights and Freedoms.

The company’s statement of claim details their extensive work on the Stephenville iron ore deposit, including conducting airborne geophysical surveys, soil sampling, and geological mapping.

They assert that these efforts identified significant high-grade iron ore, with potential for a major mining operation that could bring substantial economic benefits to the region.

Tacora Resources, the company for whom the claims were allegedly 'reserved,' already operates the Scully Mine in Labrador West.

Documents show Tacora had previously expressed interest in the Stephenville deposit. The lawsuit raises questions about whether the province prioritized one company over another, and if so, on what grounds.

East Coast Mining is seeking an injunction to prevent the Newfoundland and Labrador government from granting the mineral claims to any other entity.

Furthermore, they are demanding significant compensation for the damages incurred due to the loss of their permits and the potential future profits from the iron ore deposit. This case promises to be a closely watched legal battle with significant implications for resource development and regulatory practices in the province.