Australian coal firm sues province for $3.83B

The province is facing another multibillion-dollar lawsuit over its decision to end all new coal-related exploration on the Eastern Slopes of the Rocky Mountains.

Atrum Coal Ltd. of Australia and its subsidiary, Elan Coal Ltd., have filed a $3.83-billion claim against the provincial government over its decision last March to impose an indefinite moratorium on coal exploration in the area north of Crowsnest Pass.

The claim, filed in Calgary Court of King's Bench, is at least the second multibillion-dollar lawsuit filed against the province this year over the decision to end coal mining in the Eastern Slopes.

It says Elan acquired coal lease applications in 2012 or 2013 that were “for the purpose of developing a metallurgical (steelmaking) coal project on three different sites in southwestern Alberta.

“In total, the Elan Project has an estimated 486 million tonnes of metallurgical ... coal and an approximate 34-year mine life,” the lawsuit says.

It says just one of the three proposed projects would create about 500 direct jobs, 650 indirect jobs and provide more than $2.38 billion in taxes and $450 million in royalties.

Atrum acquired Elam in March 2018 at a time when Alberta's existing policy on coal exploration and development “both allowed and encouraged coal exploration and development in the lands underlying the Elan Coal Leases.”

The effect of Alberta's actions has deprived the two firms of the value of the leases and caused Atrum's share price to plunge from 30 cents Australian per share to one cent.

“As such, Alberta is liable to Atrum and Elan in the amount of approximately CND$3.53 billion,” it states. The suit seeks an additional $300 million for shareholders losses.

The court document says Elam holds coal leases on about 223 square kilometres of Crown lands in Alberta near Coleman.

A statement of defence disputing Atrum and Elan's unproven claim has not been filed.