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Quebec judge rejects IOC efforts to have $900 million lawsuit dismissed

09/22/2014 04:10 EDT | Updated 11/22/2014 05:59 EST
MONTREAL - A Quebec judge has rejected the Iron Ore Company of Canada's efforts to dismiss a class action lawsuit filed by two Innu communities which claim the miner has violated their rights for nearly 60 years and are seeking $900 million in compensation.

The Innu First Nations of Uashat Mak Mani-Utenam (Uashaunnuat) and Matimekush-Lac John (MLJ) claim the IOC, which is majority owned by Rio Tinto (NYSE:RIO), caused harm by operating a large mining complex and railway on traditional territory in northeastern Quebec and Labrador since the 1950s without their prior consent.

The mining complex and activities are located in the communities of Schefferville, Labrador City and Sept-Iles.

Quebec Superior Court Justice Marc-Andre Blanchard last week rejected IOC's claim that the Innu had to sue the government instead of the company.

The Innu claim that IOC's mines and other facilities have ruined the environment, displaced members from their territory and prevented them from practising their traditional way of life. They also said the 578-kilometre railway between Schefferville and Sept-Iles has opened up their territory to "numerous other destructive development projects."

The allegations have not been proven in court.

The Innu said in a news release Monday that they will also contest in court a new mine called "Wabush 3," which IOC wants to build in the Labrador City area.

The IOC and Rio Tinto declined to comment on the ruling.

The $900 million represents IOC's profits at the facilities since 1954, according to Innu calculations.

Innu leaders said they aren't opposed to mining development, but added that the era of developing lands without treating Innu as owners is over.

"After more than 60 years of having our rights violated, it is about time that IOC Rio Tinto pays its rent," said Real McKenzie, chief of Matimekush-Lac-John.

Rio Tinto owns a 58.7 per cent sake, followed by Mitsubishi with 26.2 per cent and Labrador Iron Ore Royalty Corporation (TSX:LIF) at 15.1 per cent, which also receives a seven per cent gross royalty on all IOC iron ore sales.

The Innu communities have reached agreements with miners ArcelorMittal, Cliffs Natural Resources, Tata Steel, New Millennium Iron and Labrador Iron Mines (TSX:LIM) that provide financial compensation for the mining activities.

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