The UCP Gives New Life to a Contentious Coal Mine

The Alberta government has endorsed a new economic innovation: zombie coal mines.

Even though federal and provincial courts have repeatedly ruled that the massive Grassy Mountain project proposed by Australian billionaire Gina Rinehart has been fairly rejected by regulators and is a dead development, Alberta Energy Minister Brian Jean now deems it a live one.

In a letter to Laurie Pushor, CEO of the Alberta Energy Regulator, Jean declared that Rinehart’s Grassy Mountain proposed open-pit coal mine should be considered an advanced project and be exempt from a ministerial order banning coal development in the mountains.

“Once a project is considered an advanced project it remains as one regardless of the outcome of regulatory applications submitted before it was declared an advanced project,” wrote Jean.

The minister, who once wrote a Calgary Herald column decrying coal projects in the Rockies, offered no explanation on how dead projects can be so quickly reanimated.

Waves of public protest in 2020 greeted then premier Jason Kenney’s plans to open the Rockies to full-scale open-pit mining for metallurgical coal. Two years later a chastened government issued a ministerial order clawing back its corporate green light for the largely Australian miners.

It specifically directed the Alberta Energy Regulator that no new coal mining activities or applications should be considered in the eastern slopes “with the exception of lands subject to an advanced coal project.”

The ministerial order defined an advanced coal project as one in which a developer “has submitted a project summary to the AER for the purposes of determining whether an environmental impact assessment is required.”

The last time the Grassy Mountain project submitted a summary and EIA was in 2015.

In 2021, a joint panel review representing federal and provincial regulators firmly rejected that project, which at the time was proposed by another Rinehart company called Benga Mining.

The joint federal and provincial panel concluded that the project’s economic, wildlife and water impacts were not in the public interest.

Rinehart then challenged that decision in the courts. Three separate courts repeatedly upheld the decision.

Meanwhile Rinehart started a new company, Northback Holdings, to revive its plans for an open-pit coal mine on an abandoned site at Grassy Mountain.

Northback requested permission from the AER to do more coal exploratory work on its lease five months ago.

As a result of Jean’s letter, the AER announced that it will now hold public hearings on those applications for exploration and a water diversion from an old lake created by previous mining in the 1970s.

Jean’s decision drew immediate condemnation from ranchers, environmentalists and legal experts.

‘Where is our environment minister on this?’

Foothills rancher Laura Laing was dumbfounded by Jean’s decision. “That our government is currently working on a water crisis plan and considering pulling from farming and oil and gas in our province while simultaneously considering an exploration and water licence from a foreign coal company is disgusting. Where is our environment minister on this issue?” asked Laing.

“In the legislature Brian Jean was not even aware that Grassy Mountain is in fact in the eastern slopes,” Laing told The Tyee. “For an issue that has irreparable and serious generational impact, it is terrifying that these decisions are being made by people who lack understanding of the landscape and issues.”

Nigel Bankes, an emeritus professor of law at the University of Calgary, said three different courts have upheld the viability of the project’s rejection and that it is legally dead. It is “an ex-project” as opposed to an “advanced project.”

Bankes told The Tyee that Jean’s directive “smacks of political interference with the regulatory processes of the AER.” While the letter does not specifically refer to Northback or even the Grassy Mountain project, “it is clear who and what is behind the letter and whose interests Minister Jean is protecting.”

Jean’s letter, for instance, makes no mention of new research funded by the Alberta government that showed old coal mines in the Crowsnest Pass, including Grassy Mountain, still pollute waterways with fish-killing levels of selenium and acid waste decades after the mines closed.

“These results underscore the lasting downstream impacts of abandoned and even reclaimed coal mines,” noted Alberta government researchers. The government did not allow the scientists to talk about the study.

Bankes said that Jean’s interpretation is absurd. “Northback doesn’t have some sort of constitutional right to continue with its project in perpetuity no matter what the joint review panel and the courts have decided.”

The country music star Corb Lund, a resident of drought-stricken southern Alberta, loudly condemned Jean’s actions.

After Lund recently met with the minister, he told the Canadian Press that he was alarmed by Jean’s ignorance about coal mining and its impact on water quality and quantity in the foothills.

"I knew more about the coal issue than he did, and I’m just a guitar player, not the minister of energy. It’s chilling to me that ill-informed politicians are making decisions about our water," said Lund.

Aggressive lobbying

In the last eight months Rinehart, who is Australia’s richest person and an outspoken climate change skeptic, has aggressively lobbied the Alberta government in an effort to revive the Grassy Mountain mine.

Northback’s CEO, Michael Young, last lobbied cabinet ministers, including Jean, the premier and the AER on Feb. 8.

While campaigning for the leadership of the United Conservative Party, Danielle Smith said that if there was strong support for the mine locally, she would consider a referendum on the project regardless of previous regulatory decisions.

Northback has begun an economic campaign to win the hearts and minds of citizens living near the mine. It includes an annual $75,000 contribution to the local school division for food.

“Nutrition plays such an important role in enabling kids to have a good day at school and an even brighter future,” said CEO Young in a statement. “Through this exciting initiative, we hope to contribute to the well-being of the kids in our neighbourhood and further strengthen our bond with southern Alberta.”

Five coal companies are now suing the Alberta government for a combined $10.8 billion. They claim the government’s backtracking on coal policy reforms favouring the industry cost them billions in lost investment and potential revenues. The case goes to trial this year.

At the heart of the controversy is Alberta’s 1976 Coal Policy, which largely banned open-pit mining in the Rockies to protect watersheds, wildlife and the province’s heritage.

Jason Kenney’s UCP government abruptly axed the policy in 2020 without public consultation. It then supported the efforts of Australian coal miners to develop metallurgical coal mines up and down the Rockies in every major watershed.

But furious resistance from ranchers, municipalities, irrigators, landowners and conservationists forced the government to reinstate the Coal Policy two years later.

A Tyee investigation found that foreign coal miners knew about Kenney’s policy change long before Albertan citizens did. And Environment Minister Jason Nixon proposed amending the Oldman River Basin Water Allocation Order to take water set aside for irrigation and conservation and give it to Aussie coal miners such as billionaire Rinehart. Coal mining uses and pollutes great volumes of water.

Kenney cabinet ministers also sent letters of support to Australian mining speculators offering them less red tape and lower corporate taxes. As well, the government promised speedy permitting and one per cent royalties.

Rinehart’s Northback Holdings has expressed dismay about how long it has waited for permits to do what it considers routine exploratory coal work.

In a Feb. 22 letter to the AER, legal counsel for Northback argued, “The applications are for data collection purposes. They are not for a full commercial mine development.”

“There is no basis for any further regulatory review of, or ongoing delay associated with, the applications,” wrote Northback.

Yet the data collection is to support a full commercial mine.

Some observers believe Northback is not really interested in coal but wants to determine how many rare earth minerals might be present on its property. In Wyoming an old $2-million coal mine became a $37-billion prospect last year once rare earth minerals were found on the lease.

Kenney, the former pro-coal premier, now acts as senior adviser to the Canadian law firm Bennett Jones, whose specialties include energy and mining development

Bennett Jones also acts as legal counsel for Northback.

The firm also represents the Coal Association of Canada, which has lobbied for mining projects throughout the eastern slopes of the Rockies. It is headed by Robin Campbell, who served as environment minister for the Progressive Conservatives from December 2013 to September 2014. He championed Kenney’s pro-coal plans.