Albertans will fork over $142.8 million thanks to an out of court deal between the provincial government and Atrum Coal.
Atrum is one of five companies suing Alberta for a total of $16 billion over the province’s coal mining policy flip-flop. A sixth company, Northback Holdings, is pursuing a separate lawsuit.
In late 2020, then-energy minister Sonya Savage rescinded the 1976 coal policy, which had banned coal exploration and mining in the eastern slopes.
This prompted a rush in coal license applications and acquisitions.
Less than two years later, Savage reinstated the policy in the face of public backlash and admitted the government should never have cancelled it.
Coal companies that had been given the green light suddenly saw red.
The would-be coal miners called their lawyers and sued the Alberta government for sunk costs and lost future earnings.
Settlement reached
Atrum announced that it had received $137 million from the Government of Alberta in a notice posted to the company website on July 17. They will be paid another $6 million after completing reclamation work.
The Atrum settlement is a far cry from the $3.5 billion that the company wanted to extract from Albertan taxpayers.
But it’s still a big chunk of change that could be spent on healthcare, watershed restoration or countless other public projects.
Stephne Legault, an Alberta-based senior manager with Environmental Defense, is calling the payout a “phenomenal waste of taxpayer money.”
“If the UCP government hadn’t first rescinded the 1976 Coal Policy and then flip-flopped on a moratorium on new mining projects in response to demands by Albertans, we wouldn’t be extorted to protect our headwaters from coal mining,” Legault said in a media release.
$90 million bonus for Atrum?
The provincial government is overpaying Atrum to the tune of $90 million, former Lethbridge mayor Chris Spearman wrote on Substack.
Spearman cited clauses in the Alberta Mines and Minerals Act that should have limited the settlement to a much lower amount.
Section 8(1)(c) of the act “allows the Minister to cancel, accept the surrender, or refuse to renew a Crown mineral agreement that the Minister deems not to be in the public interest.”
The act also stipulates that companies are entitled to compensation for the amount paid to the Crown for permits and licenses, as well as costs for development, reclamation and interest.
In its amended statement of claim, Atrum claims to have paid $5.3 million to acquire coal assets and spent $41 million on exploration. Add in another $6 million for reclamation, which the province agreed to as part of the settlement, and the total amount of compensation should be $52.3 million.
“So how did they get to $142.8 million? The Alberta government has paid $90 million more than would be paid by applying the rules under the existing legislation,” Spearman said.
Backroom details kept secret
In January, the provincial government lifted the moratorium on eastern slopes coal exploration and mining. Media statements made by Premier Danielle Smith at the time implied that the decision was made to protect Albertans from lawsuits.
The lawsuits didn’t go away.
By settling out of court, the provincial government sidesteps the possibility of Premier Smith, Energy Minister Brian Jean, other ministers and senior government staff being called to testify under oath in court.
Corb Lund, a musician-turned anti-eastern slopes coal mining activist, said government messaging around the coal company lawsuits doesn’t add up.
“When’s the last time you saw Daniel Smith be challenged by a fight and just go, oh, we’re going to lose? That’s not how she operates,” Lund told TheRockies.Life in a Zoom interview. “Imagine if it was a solar panel company suing the government. There’s no way that Smith would just roll over without a fight.”
Tear the bandaid off
Lund said he’s non-partisan and doesn’t support any political party. As hard as it is to swallow, he supports “tearing off the bandaid” and paying whatever is needed to get coal companies out of the eastern slopes.
He said it will be cheaper than the long term costs of coal mining and the damage to watersheds, fish, farming and downstream communities.
“The fact is, the UCP is the party that got us into this mess by going to these companies and promising the moon without a mandate for it,” Lund said. “So if the UCP has to wear egg on their face, so be it.”
