An Australian coal company is alleging that Alberta is liable for billions after reversing course on policy tied to coal development in the province.
As first reported by the Calgary Herald, Atrum Coal Ltd., along with its subsidiary, Elan Coal Ltd., says it is seeking $3.53 billion, tied to the value of its Elan Project. It is also seeking an additional $300 million for losses to shareholders.
It claims recent actions surrounding Alberta's 1976 coal policy forced Atrum's share price to plummet and deprived the companies of the value of ongoing coal projects.
The companies filed the claim in Calgary Court of King's Bench on Sept. 14.
In May 2020, the Alberta government rescinded the 1976 policy, which limited coal development in the eastern slopes. After considerable pushback and a barrage of criticism and legal challenges, the province reversed course, barring exploration and development for the time being.
But in that period of time, companies like Atrum commenced exploration work with the plan to establish coal mines, building new roads and establishing hundreds of drill sites.
Now, Atrum alleges the Alberta government is liable for what it says are the effects of that policy reversal.
In its statement of claim, Atrum and Elan write that the Elan Project has an estimated 486 million tonnes of metallurgical coal and an approximate 34-year mine life.
Developing Isolation South alone, the companies wrote, would have created around 500 direct jobs and 650 indirect jobs, pegging its value as exceeding $3.53 billion.
A spokesperson for Alberta Minister of Energy Sonya Savage did not respond to a request for comment by publication time. Representatives with Atrum also did not comment by publication time.
Atrum's lawsuit follows a similar one filed by private coal company Cabin Ridge in early July, which said it was seeking more than $3.4 billion in damages from the Alberta government, also citing the province's reversal on coal policy.
Atrum put its Elan Hard Coking Coal project on hold after the reinstatement of the 1976 policy. Its shares, once trading at a peak of nearly $1.95 AUD in 2013, were trading at $0.0080 AUD as of Sept. 23.
Carleton-James Osakwe, an associate professor of finance at Mount Royal University in Calgary, previously told CBC News that the company today finds itself in a challenging position.
"The company's low cash balance and low projected cash flows from operating activities indicate that without an external cash infusion (say through an equity issue), it may be difficult for the company to remain a going concern beyond 2022 unless its Elan project, which is on hold, is somehow able to begin production," he said in an email.
READ | The statement of claim filed by Atrum Coal Ltd. and Elan Coal Ltd.: