By Brad Thompson, courtesy of The Australian.
Privately owned Valory Resources, led by heavy hitters in Queensland coal, says it will be one of the big winners after authorities in Canada removed industry bans while staring down the barrel of multi-billion-dollar lawsuits filed by Gina Rinehart and others.
The policy changes in Alberta help clear the way for mining by Valory on the eastern slopes of the Rocky Mountains.
The Alberta government removed moratoriums on coal exploration and development in the lead up to a trial due to start next month where other mining companies will push damages claims.
The Alberta government has indicated it will only approve underground steelmaking, or metallurgical, coal mines like Valory’s Blackstone project as it works on a new policy for the industry after lifting moratoriums imposed in 2022.
Valory, a Canadian company with Australian leadership, has been in close contact with the government in Alberta on the new policy after the mortarium on exploration and development was lifted to limit damages from the lawsuits. Alberta Premier Danielle Smith has said the province acted with taxpayers in mind.
Several coal companies, including Cabin Ridge entities controlled by Australian rich lister Tim Roberts through his Warburton Group, are behind lawsuits seeking more than $US15bn ($23.8bn) in total filed after the bans on exploration and development were imposed.
Mrs Rinehart’s Hancock Prospecting, via subsidiary Northback, has launched separate legal action over its Grassy Mountain metallurgical coal project, and has sought more than $US2bn in compensation.
In a statement regarding its damages claim, Cabin Ridge said the Alberta government’s “de facto expropriation” of its freehold mineral property had prevented development of a metallurgical coal project and “deprived the Cabin Ridge companies of their substantial investments in Alberta”.
Alberta’s energy regulator last week heard closing arguments in a public hearing on Mrs Rinehart’s Grassy Mountain mine permit. Green groups are fiercely opposed to the project, which sits on land mined more than 60 years ago that Northback argues has never been properly rehabilitated.
Valory described its dealings with the Alberta government as positive and rated the investment climate better than what was on offer in Queensland despite the legal battles being waged by Mrs Rinehart and Mr Roberts.
Valory took a swipe at Queensland’s sky-high royalty regime and approval delays at a state and federal level, and said this contrasted with moves by Canadian authorities and banks to wind back restrictions. Valory is looking to become a major global steelmaking coal producer through its Blackstone project that was once owned by Rio Tinto.
Valory has Stanmore Coal co-founder Vaughan Wishart on board as executive co-chairman and its president is former AMCI Australia managing director Brian MacDonald, who is an old ally of coal billionaire Hans Mende.
Mr Wishart, Mr MacDonald and Valory head of project finance Glenn Vassallo were invited to speak to the Alberta government in person last November as Valory made its case for underground mining at Blackstone. “They were extremely interested to understand the underground mining methodology,” Mr Vassallo said. “With ongoing uncertainty in the Australian market, we have turned to Canada, where the regulatory and investment environment is supportive of responsible resource development.”
Mr Vassallo said the Blackstone tenement package was so large it would cover eight mines if overlaid on the Bowen Basin, with the project capable for producing 10 million tonnes a year of premium low-volatile steelmaking coal for decades.
Under the changes in Alberta, the province’s energy regulator was directed to reinstate Blackstone’s drilling permit by the end of January.
Mr Vassallo said the Canada project offered an exceptional royalty regime compared to Queensland, where major coal players BHP and Glencore have warned of dire consequences for investment.
