The Government of Alberta has settled with two of the five companies suing for more than $16 billion related to a government flip-flop on coal mining policy.
Last month, Evolve Power Ltd. (formerly Montem Resources) and Atrum Coal Ltd. announced that they had reached out-of-court agreements with the province to settle their claims.
Settling out of court
Nigel Bankes, a resource law specialist from the University of Calgary, told TheRockies.Life that he’s not surprised to see out-of-court settlements.
“There have been rumours of negotiations for months,” Bankes said in an emailed response.
Neither Evolve, Atrium nor the provincial government have disclosed the dollar value of the settlements.
It’s the way many observers predicted this litigation would play out.
By settling out of court, the UCP avoids the potential embarrassment and fallout from having ministers and senior government bureaucrats testifying under oath about why the 1976 coal policy was rescinded then reinstated.
Policy flip flop
In 2020, Alberta suddenly scrapped the 1976 coal policy and opened up the eastern slopes to an avalanche of coal mining applications.
The following year, then-energy minister Sonya Savage reinstated the policy and created the Coal Policy Committee.
The committee gathered feedback from regular Albertans, scientists, and industry about how best to manage coal resources moving forward.
“The engagement process found that Albertans considered the environmental impacts of potential coal mines to be a “top of mind issue”, along with concerns about water and concerns about the coal categories in the 1976 Coal Policy,…” said the committee’s final report, submitted in December 2021.
One of the report’s key recommendations was for the Alberta government to develop a modern coal policy with strict rules about what type of mining would be allowed and where.
In 2023, Evolve, Atrum, as well as Cabin Ridge Holdings Ltd. and Black Eagle Mining Corp. sued the province for sunk costs and lost revenue earning potential for the policy switch two years earlier.
Northback Holdings, the Australian company still pushing the twice-rejected Grassy Mountain coal project, launched a separate lawsuit against the province.
A modern coal policy
The government has used the lawsuits to explain a relaunch of Alberta’s coal mining industry.
In late December 2024, the province announced they’d created the Coal Industry Modernization Initiative.
The initiative will develop “a modern coal policy that balances responsible resource development with strong environmental protections,” according to its website.
A month later, before any new rules had been formalized, Premier Danielle Smith reopened the eastern slopes to coal exploration.
“If you look at the lawsuits that have been filed, it’s $16 billion with the potential liability,” Premier Smith told CBC in an interview at the time. “We have to take that seriously, and we have to make sure that the taxpayers are protected. At the same time, metallurgical coal is incredibly valuable.”
What we don’t know
The lawsuits didn’t go away, however, and now the government has settled for an undisclosed dollar amount.
It’s unclear as well whether companies have given up anything in terms of coal rights as a result of the suits.
The little that taxpayers do know, is from coal company websites and not official government press releases.
“Making a FOIP (freedom of information) request will be a waste of time since the [Government of Alberta] is likely entitled to withhold information under settlement privilege,” Bankes said. “The most likely way to get the key information will be from securities disclosures.”
Companies are required by law to make securities disclosures about business and financial activities.
Bankes expects the lawsuits against Cabin Ridge and Black Eagle will be settled in a similar undisclosed manner.
The Northback Holdings lawsuit is a different story, he said.
“Northback will be much more difficult because you don’t get compensation for a project that was rejected,” Bankes said.
