PERTH (miningweekly.com) – Coal hopeful Atrum Coal has started a claim against the government of Alberta for the de facto expropriating of its Elan coal leases and are also seeking monetary compensation pursuant to the doctrines of private nuisance and unjust enrichment.

Atrum was last year forced to pause a prefeasibility study for the Elan project after the government of Alberta took a decision to reinstate the previously rescinded Coal Development Policy for Alberta.

The policy dictates the condition for coal leasing, exploration and development, and prohibits future coal exploration approvals on particular land types.

Elan is located on land designated as Category 2 under the coal policy, referring to land not normally considered for openpit coal mining, unless appropriate environmental stewardship is applied.

Atrum said in its quarterly results on Friday that while Atrum and its wholly owned subsidiary Elan Coal are doing work to quantify the claim, the anticipated value could potentially be in the range of A$0.3-billion to A$3.9-billion.

There ASX-listed company said that there is the potential, however, that Atrum will not be successful in its claim against the Alberta government and receive no compensation.

The company will use proceeds from a recent entitlement offer to fund the litigation efforts and to meet ongoing operational expenses.

All non-essential activities at Elan have been suspended pending direction from the government, and Atrum has further reduced staffing levels to 2.4 full-time equivalents, as of May this year.

During the quarter, Elan completed site care and maintenance activities, which are a requirement of existing exploration permits. These activities involved grouting of previously drilled well locations and road maintenance to ensure site safety and environmental compliance. Elan also commenced a review of future rehabilitation and reclamation work.

“The team continues to focus on cost reduction measures whilst we proceed with our claim. Engagement efforts continued with various stakeholders including the government of Alberta, First Nations, Indigenous business leaders, the local community, and the public through various channels,” said Atrum non-executive chairperson Glen Koropchuk.