Altius sues Ottawa, Alberta for lost coal royalties

Altius Minerals Corp. [ALS-TSX; ATUSF-OTCQX] said the Genesee Ltd. Partnership, of which Altius is the General Partner, has filed a law suit against the governments of Alberta and Canada.

The law suit claims $190 million in damages while describing actions that it feels were tantamount to expropriation of its royalty interest in the Genesee coal mine and power plant in Alberta. Specifically, the suit alleges and unlawful taking of its property and undue interference with its economic interests.

Altius directly and indirectly holds diversified royalties and streams that generate revenue from 15 operating mines, located in Canada and Brazil. These operations produce copper, zinc, nickel, cobalt, iron ore, potash and thermal (electrical) and metallurgical coal.

In 2014, Altius said it made a significant investment in the royalty from the coal that underpins the integrated Genesee Mine and power plant. The company said this investment decision relied upon policies and regulations enacted in 2012 that permitted the Genesee power plant’s advanced clean burning technologies to continue to generate electricity from coal under a decommissioning schedule that extended to 2055.

Subsequent to Altius’s investment, both Alberta and Canada announced policy and regulatory changes that will instead cause the Genesee power plant to discontinue all coal-fired electrical generation and payment of underlying coal royalties by 2030.

The damage claim amount of $190 million is the estimated future value of the portion of the royalty that has been taken as a result of the policy change, Altius said in a press release.

“Altius is a small Canadian company that relied upon the clearly defined policy and regulatory framework to make a major investment. We then suffered grave damages when these governments changed their policy in a manner that essentially expropriated our future royalty entitlements without compensation,” said Altius CEO Brian Dalton.

“While we fully respect the rights of both governments to change environmental and economic policy as they see fit, we believe that it is also reasonable for us, or any other good faith investor in Alberta and Canada, to expect fair compensation in accordance with the rule of law when it becomes the collateral victim of such policy change,” Dalton said.

On Tuesday, Altius shares eased 1.23% or 16 cents to $12.82. The 52-week range is $15.58 and $11.82.

Altius has recently been linked to gold exploration in central Newfoundland through a 19.9% stake in Antler Gold Corp. [ANTL-TSXV] and its ownership of 9.2 million common shares of Sokoman Iron Corp. [SIC-TSXV] plus 1,800,000 warrants and a 1.5% NSR royalty on Sokoman’s Moosehead gold project.