Report of the Joint Review Panel, Benga Mining Limited, Grassy Mountain Coal Project, 2021 ABAER 010 (June 17, 2021)

Report of the Joint Review Panel, Benga Mining Limited, Grassy Mountain Coal Project, 2021 ABAER 010 (June 17, 2021)

Benga Mining Limited (Benga) submitted applications to the Alberta Energy Regulator (AER) to construct, operate, and reclaim a new open-pit coal mine in southwest Alberta, Canada.  The proposed project included surface coal mine pits and waste disposal areas, a coal preparation plant, and associated infrastructure including a coal conveyor system, an access corridor, a rail load-out facility and other ancillary buildings and infrastructure.  Coal produced at the mine was slated for export.  

The applications included an environmental impact assessment (EIA) submitted to AER and the Canadian Environmental Assessment Agency (CEAA).  The mine was projected to produce 4.5 million tonnes of coal over 23 years.  A joint federal-provincial panel was appointed to review the applications and discharge decisionmaking (AER) and review (CEAA) obligations under applicable provincial and federal laws, including the Coal Conservation Act and the Canadian Environmental Assessment Act.  

The Joint Review Panel issued a lengthy report in June 2021.  Under section 8.1(2) of the Coal Conservation Act, the AER “shall not grant a permit, licence or approval or an amendment of a permit, licence or approval under this Act unless in its opinion it is in the public interest to do so.” Coal Conservation Act, RSA 2000, c. C-17 (available at https://canlii.ca/t/522qg).  Acting as the AER decisionmaker, the Panel denied Benga’s application because the significant adverse environmental impacts of the proposed coal mine “outweigh the low to moderate positive economic impacts of the project.”  Report, p. 623. The panel explained:

Overall, we conclude that the project is likely to result in significant adverse environmental effects on westslope cutthroat trout and surface water quality, and these negative impacts outweigh the low to moderate positive economic impacts of the project. Accordingly, we find that the project is not in the public interest. In making this determination, we understand that this means that the expected employment, related spending, and economic benefits for the region will not be realized. However, even if the positive economic impacts are as great as predicted by Benga, the character and severity of the environmental impacts are such that we must reach the conclusion that approval of the Coal Conservation Act applications are not in the public interest.

While we found the project is likely to result in additional significant adverse effects beyond those on surface water quality and westslope cutthroat trout and their habitat, we find that these effects, in and of themselves, would not have been sufficient to determine that the project is not in the public interest. It is the nature and magnitude of effects on surface water quality and westslope cutthroat trout and their habitat that drive our public interest determination.

Id., pp. 623-24.

Acting as a review body under the CEAA, the Panel conducted an assessment of the environmental impacts of the proposed open-pit mine, making decisions based on “science, traditional knowledge of Indigenous peoples, and other relevant evidence.”  Id., p. 625.  Among its findings, the Panel made the following key points:

•  The project would likely result in significant adverse environmental effects on surface water quality, westslope cutthroat trout and their habitat, and whitebark pine.  Id., p. 626

•  The project would significantly impact the physical and cultural heritage of specific Treaty 7 First Nations. These First Nations communities withdrew their objections to the project after entering into agreements with Benga. The project would also cause adverse effects to traditional land uses and physical and cultural heritage for some Indigenous groups, but the effects would not be significant.  Id. 

•  As designed, the project would be unlikely to meet proposed effluent standards not yet in force and would have trouble obtaining a permit under the Species At Risk Act due to potential impacts on westslope cutthroat trout habitat.  Id., pp. 626-27.   

•  The mining company “adopted optimistic assumptions in its economic analysis, likely overestimated some of the benefits, and did not consider a number of potential downside risks to its projected economic benefits.”  Id., p. 627.

•  “Benga made overly optimistic assumptions of the effectiveness of its proposed mitigation measures. This does not represent the conservative approach appropriate for the sensitive environmental setting of the project.”  Id., p. 626.  

After reviewing the Joint Panel’s Report, the Canadian Minister of the Environment issued a decision notice in which he determined that the proposed open-pit coal mine is likely to cause significant adverse environmental effects under subsections 5(1) and 5(2) of the Canadian Environmental Assessment Act.  The notice also announced the decision of the Governor in Council that the significant adverse environmental effects of the proposed project are not justified in the circumstances.  Decision Statement (Aug. 6, 2021)(available at https://iaac-aeic.gc.ca/050/evaluations/document/140985).  

Benga sought permission to appeal the Joint Review Panel Report to the Court of Appeal of Alberta. The Court denied permission in early 2022.  Benga Mining Limited v. Alberta Energy Regulator [2022] ABCA 30 (available at https://www.canlii.org/en/ab/abca/doc/2022/2022abca30/2022abca30.html).  The Supreme Court of Canada similarly denied review.  Benga Mining Limited v. Alberta Energy Regulator (Revised order dated Oct. 20, 2022)(available at https://scc-csc.lexum.com/scc-csc/scc-l-csc-a/en/item/19506).