Alberta’s Big Payouts to Spurned Australian Coal Miners

Mark another milestone in Alberta Premier Danielle Smith’s ongoing cave-in to coal interests. The United Conservative Party government recently awarded a $95-million settlement to the Australian mining firm Montem Resources, which now calls itself Evolve Power.

It turns out that about a third of that settlement, all taxpayers’ money, will go to an investment firm in Melbourne, Australia. And that investment firm funded Montem’s lawsuit against the Alberta government.

Reaction has been swift and damning.

“It’s despicable that an Australian investment firm and its shareholders will receive $35 million... to resolve an issue that never should have happened in the first place,” noted David Luff, a former assistant deputy energy minister who helped craft the 1976 Coal Policy that once protected the Rockies’ eastern slopes from open-pit mining. “Particularly, when that $35 million could have been spent to address some of the significant issues in the Alberta teachers’ strike such as class sizes, staffing, working conditions and support.”

Montem is just one of five largely Australian companies — along with Valory Resources (also known as Black Eagle Mining Corp.), Atrum Coal, Northback Holdings and Cabin Ridge Holdings — that sued the Alberta government for a total of $15 billion in 2023 over its shilly-shallying on coal policy.

The flip-flops went like this.

After aggressive lobbying by coal companies, in 2020 the UCP government quietly rescinded restrictions on open-pit mining in the Rockies (the 1976 Coal Policy).

Unprecedented public opposition then forced the government to restore those protections in 2021 and 2022.

Then in 2025 the Smith government once again performed a switcheroo by lifting its moratorium on coal development and exploration in response to the lawsuits.

The UCP then invited the coal industry to design a modern coal policy without public consultation. Perhaps to avoid what may have been a sensational public trial, Alberta’s government told the companies it would settle out of court.

In any case, Atrum Coal collected a cool $143 million earlier this year. And now Montem takes home $95 million. (Montem by the way is the same company that told the Alberta Energy Regulator to piss off when it informed Montem of excessive selenium contamination at its Tent Mountain property. CEO Peter Doyle then threatened to sue the regulator in 2021 and compared it to a meddling proctologist, kicking off a two-year dispute.)

There’s no word yet from Cabin Ridge Holdings on any settlement.

Valory Resources, which wants to build a massive underground mine near Nordegg under 15,000 hectares of public land, told The Tyee that it has settled its lawsuit.

After the government cancelled its moratorium on coal exploration last January, Valory’s legal claim shifted “from a permanent expropriation claim to a temporary expropriation claim,” said Glenn Vassallo, head of corporate and project finance for Valory, in an email. Given the complicated nature of such a claim, “both Valory and the Alberta Government mutually agreed to settle and discontinue the claim.”

Asked if the Alberta Energy Regulator’s unprecedented cancelling of a public hearing on another Valory project was part of the mutual agreement, Vassallo replied, “No it was not.”

Last August, the CEO of the Alberta Energy Regulator directly intervened and cancelled a public hearing process approved by his own agency on the Mine 14 project at Valory’s direct request. Mine 14, an underground coal project in Grande Cache, has now been approved without a hearing. The unprecedented AER intervention is now being challenged in court by two environmental groups.

William Donahue, an environmental scientist who formerly served as chief monitoring officer and executive director of science in Alberta’s environmental monitoring and science division, finds these developments disturbing and irregular.

“The fact that Smith has handed shareholders of foreign coal companies hundreds of millions of dollars is crazy, especially when these projects were only on paper and the total capital value of the stock of some of these companies was minuscule,” Donahue told The Tyee.

Montem’s settlement news comes from a press release issued by a corporate office in Melbourne, Australia. In exchange for $95 million, Montem Resources has agreed to drop its $1.75-billion lawsuit, which alleged, among other things, that the government’s 2022 coal moratorium amounted to “the de facto expropriation of its Chinook and Greenfield projects” in the Crowsnest Pass region. As part of the deal Montem has also surrendered its freehold and Crown leases back to the government.

Nearly a third of the settlement, $35 million, will go to an investment firm also based in Melbourne called Wahl Citadel. As Montem Resources explains in its corporate reports, it didn’t have the money for legal costs for a trial that was scheduled to take place last April. So Wahl Citadel provided a loan in 2024 of AU$5 million in exchange for 100 shares. The investment firm later provided another $1 million.

The practice is called litigation funding, a multibillion-dollar global industry. Investors pick a lawsuit and then bet on it like a stock hoping for a big return.

Under the terms of the agreement, Montem didn’t have to pay back Wahl Citadel anything if the lawsuit failed or resulted in no settlement. Even Montem called the outcome “uncertain.” But if successful, Wahl Citadel was entitled to walk away with a $35-million return on its $6-million investment. (The company declares on its website that its purpose is to “turn ambition into wealth by transforming rare opportunities into exceptional returns.”)

One of the chief benefactors of Wahl Citadel’s funding was the Canadian business law firm Bennett Jones. In fact, lawyers with the firm have handled most of the Australian coal lawsuits against the Alberta government. Jason Kenney, the UCP premier who invited foreign speculators to mine the Rockies in 2020 with promises he could not keep, now works as a senior adviser for Bennett Jones.

Observers wonder why Alberta’s government didn’t use existing mechanisms to arrive at settlements that could have been far lower.

Under the Mines and Minerals Act the province has a method of compensating holders of Crown leases when the government decides exploration or development is not in the public interest. The mechanism is cost-based. In other words, it merely compensates a company for costs incurred to date. It does not pay for claimed market value or future profits.

For reasons that have never been explained, the Smith government did not choose to pursue this avenue in response to the lawsuits. Instead, Smith and Energy Minister Brian Jean repeatedly intimated that the coal company lawsuits and their $15-billion claims had merit by saying they posed a threat to taxpayers. (Government sources have told The Tyee that Smith and Jean’s ad hoc comments raised the ire of the government lawyers charged with defending the province’s interests.)

“At the very least, I'd expect Alberta to have put up an aggressive legal defence, but it seems they've simply caved to the ludicrous demands of hyper-aggressive CEOs,” noted Donahue, who is a lawyer. “It really is outrageous.”

Montem admits in its court documents that it spent about $15 million on its coal properties in the Crowsnest Pass since 2014.

Nigel Bankes, a well-known resource lawyer, writes that it “seems obvious that the public deserves an explanation of why the Crown settled Montem’s claims in the amount of $95 million as opposed to a cost-based claim for $15 million.”

The same question could be asked about the Atrum settlement. Its sunk costs amounted to $46 million, yet the government awarded the company an additional $100 million.

“If there are other factors, of which the public is unaware, that led the Alberta government to offer what seems to be such a large additional payment, Alberta taxpayers deserve to know,” notes Bankes. “Did the Alberta government, for example, make promises to Atrum of which we are not aware?”

Critics of the Montem and Atrum settlements question whether Smith and her government have respect for public disclosure, transparency and accountability. They ask whether a negligent administration has awarded more public dollars to foreign nationals due to its own incompetence and outright refusal to use Alberta laws to protect Alberta’s best interests.

Taxpayers are likely to be tapped to foot the bill for more payouts. Next, we’ll learn what settlements are awarded to Cabin Ridge Holdings and Northback Holdings.