Critics are calling the penalty handed out to a repeat offending coal company in northern Alberta “a slap on the wrist.”
Last week the Alberta Energy Regulator fined CST Canada Coal Ltd. $9,000 for leaking 1.1 million litres of toxic tailings from settling ponds into the Smoky River in the spring of 2023.
It’s not the first time the Chinese-owned coal mine near Grande Cache has polluted this river, nor the first time it’s received a bare-minimum penalty for doing so.
Months before this latest leak, frozen pipes and broken sensors caused 100,000 litres of coal wash to dump into the Smoky, a key tributary of the Peace River. The company failed to immediately report this spill.
And last year, the AER fined the operator $22,000 for the December, 2022 spill of toxic wastewater into the Smoky River that lasted almost 24 hours.
“This is an indication that companies are going to get a slap on the wrist if they put mine wastewater into the aquatic environment,” said Tara Russell, of the Canadian Parks and Wilderness Society, in an interview with CBC News.
Russell said this a big concern now that the province has opened up the eastern slopes to coal mine development.
AER spokesperson Renato Gandia told TheRockies.Life in an email statement that penalty amounts are dictated by legislation.
”The AER’s penalties are calculated within a legislative framework that aims for consistency, transparency, and deterrence. We are guided by provincial regulations, which outline maximum amounts,” the email statement reads.
However Drew Yewchuk, a lawyer who studies AER decisions, said it’s well within the regulator’s power to levy bigger fines.
“The AER could easily have justified an administrative penalty in the $20,000 range for the second one without much effort. Beyond that, the AER could have gone much higher if they pursued a prosecution as they are doing for Imperial’s [Imperial Oil] oil sands leak,” he told The Rockies Life. “The AER could also amend the terms of the mine approval to require a more secure tailings design, which is the major regulatory power available to the AER that they have not touched.”
Yewchuk said the relatively small fine is a symptom of a bigger problem at the AER and the failure to protect water, especially when a suspect mining company is involved.
The regulator requires cash security or a performance bond from the operator. It’s the way to ensure the AER has resources in place to properly close the mine in the event that the operator goes bankrupt.
If adequate resources aren’t in place to close a mine safely, the AER may be reluctant to levy stiff penalties that might push a company into bankruptcy and leave the provincial government – and all Albertans – with an expensive environmental liability on its hands.
The result is that bad actors like CST Coal are able to keep limping along and reoffending.
“The AER’s failure to have proper closure security means enforcement for infractions leaves the regulator in a tricky spot,” he said. “The AER still doesn’t know what to do with companies when there is a concern that big penalties would endanger project viability.”
All indications are that CST Coal is barely viable.
As noted in the AER’s February, 2025 decision senior staff were not on site for hours after the spill was first noticed, and there was no available equipment for ice removal at the settling ponds, among other operational failures.
In 2012 Marubeni Corp. of Japan and Hong Kong’s Winsway Coking Coal Holdings Ltd. paid $1 billion for the mine when coal prices were high. Two years later the partnership sold a controlling interest in the mine for $2.
“The underlying value of the mine is questionable, so the ownership may cut corners unless they are shut down completely,” Yewchuk said.According to a recent statement on CST Coal’s website, the company has submitted a plan to the AER to prevent future spills.
