A U.S. coal miner is launching a NAFTA suit against Alberta over its policy to phase out coal in the electricity system by 2030, saying it is entitled to the same compensation for losses at mines in the province as Canadian firms received.
Denver-based Westmoreland Coal Co. served a statement of claim to the Canadian and Alberta governments on Monday, arguing the provincial New Democrats violated the North American free-trade agreement by compensating Canadian-owned utilities but not the U.S. mining company for losses related to its 2015 coal phase-out plan. Under NAFTA, the federal government is the formal respondent in such claims and ultimately responsible for any arbitration award.
The company has seven mines in Canada – five in Alberta and two in Saskatchewan – which it bought in 2013 from Sherritt International Corp. for $465-million. It has invested $98-million in its Canadian operations, and assumed more than $100-million in liabilities, including reclamation obligations, the company’s chief legal officer, Jennifer Grafton, said in an interview on Monday. It is demanding $500-million in compensation for losses at its Alberta mines.
“This is about being treated fairly as an Alberta company in line with how Alberta treated the other companies that were similarly situated,” Ms. Grafton said. “We felt like we were denied national treatment and were discriminated against being a U.S. company.”
When Westmoreland bought the mines, the federal Conservative government had announced a policy that required coal-fired generating stations to be outfitted with carbon-capture technology or closed when they reached 50 years of operating life. Six generating stations in Alberta – five of them Westmoreland customers – were expected to operate beyond 2030.
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