Four Alberta coal mines (barely) hanging on

After a sharp reversal of Alberta government policy on coal development, four coal mine exploration projects are allowed to proceed, but their final approval is in doubt

Western Investor
February 9, 2021

| Western Investor files
— | Western Investor files

In an abrupt reversal, the Alberta government is reinstating a 1976 coal policy that protected parts of the Rocky Mountains from coal development, in the wake of province-wide opposition to the policy's cancellation.

In May 2020, the government said that scrapping the 1976 policy was a “common-sense decision” that would “create certainty and flexibility for industry” and help attract investment. It argued the change puts the acquisition of coal rights on equal footing with other commodities such as oil and gas, and said regulatory reviews will protect sensitive land.

But on February 8, Alberta Energy Minister Sonya Savage said the province listened to the feedback from Albertans. There will be consultation before any additional changes are made, she said. 

However, there are two applications for coal exploration that were approved since June that will be allowed to continue. Another four exploration projects were approved under the 1976 policy that will also be allowed to continue.

Atrum Coal Ltd., an Australian company ,is proposing one of the new mines. Its Elan project in the Crowsnest Pass area is slated to produce about six million tonnes of metallurgical coal a year. Metallurgical coal, unlike thermal coal, is not burned for heating or energy, but used in steel production.

Atrum, and other miners, are hoping to share in an increase in coal prices. According to a FocusEconomics forecast published by Coal Investing News, prices of metallurgical coals will average US$141 per metric ton by Q4 2021 and US$147 in Q4 2022, up from $128 per tonne in January 2021.

Overall coal future were trading around $82 a tonne in the second week of February, compared to a low of $50 per tonne in September of 2020.

China is the world’s largest customer for coal.

The province now says it will not issue new coal leases in the Rocky Mountain areas until consultations are done.

"What we're doing today – keeping the 1976 coal policy in place and committing to consult on a modernized policy – is what we should have done in the beginning," Savage said in a press conference. 

The government's latest announcement includes reinstating four categories that dictate where and how coal leasing, exploration and development can occur.

Savage has issued an order to the Alberta Energy Regulator (AER) so no mountaintop removal will be permitted and all of the restrictions under the 1976 coal categories are to apply.

While the current applications can proceed, there appears doubts that any will survive to the production stage after the Alberta government’s change of course.

“Alberta’s government is absolutely committed to protecting the majestic Eastern Slopes and the surrounding natural environment," Savage stated in a media release after the press conference. 


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