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“It’s a first step. I’m going to be thrilled if it gets to the point ... that they get the application to start mining.” 

Australian-owned Northback Holdings Corp.‘s project at Grassy Mountain was rejected in 2021, when a panel ruled likely environmental effects on fish and water quality outweighed potential economic benefits. 

The project, located on an inactive legacy coal mine site in the Municipal District of Ranchland, was later revived. 

Last year, it was exempted from the Alberta government’s decision to ban open-pit coal mines. Northback’s application was considered an “advanced” proposal. 

A written decision from the regulator on Thursday says it determined approving the project is in the public interest and the project won’t have negative effects on water quality or wildlife. 

The decision grants Northback permits to drill and divert water to the site. 

Residents of Crowsnest Pass, which saw its last coal mine close four decades ago, voted in a referendum in November. About 72 per cent supported the development of a coal mine at Grassy Mountain. 

“The project would be fantastic for our community. They’re going to employ 300-plus people. Not all will live in our community, but we’re going to get our fair share,” said Painter. 

“It will strengthen our schools, our hospital, the business community. There’s just so many pluses.” 

The regulator’s decision says the company will only be able to draw water from a nearby end pit lake that it owns, and that’s not directly connected to other water bodies or rivers. 

It says it’s possible there will be runoff from the lake but there wouldn’t be any effect on water quality or quantity downstream. 

David Thomas, a communications coordinator with Crowsnest Headwaters, a group that led the “no” campaign, wasn’t surprised at the AER decision.

“It’s exactly what we expected,” said Thomas.

“There’s nothing more we can do. As long as we loyally and honestly participate in the process, we implicitly respect the results.”

Thomas said the company should abandon the project if it doesn’t find sufficient coal or if there is a change in government before the project goes ahead.

An official with the Environmental Defence advocacy group said the project is in the interest of billionaires and Alberta Premier Danielle Smith, not the public. 

Stephen Legault said the decision demonstrates “a reckless disregard for the health of southern Alberta’s water.” 

He said renewed mining would lead to irreversible water pollution and water withdrawals from the Crowsnest River system, impacting farmers, ranchers, anglers and downstream communities, including Lethbridge. 

“If the premier had the best interests of Albertans in mind, she wouldn’t allow a coal mine to be built where southern Albertans get their water from,” Legault said 

“Instead, Alberta would invest in the region’s long-term economic prosperity, protect the province’s headwaters, and stand up to foreign bullies who only want to destroy our headwaters in the name of profit and privilege.” 

This report by The Canadian Press was first published May 16, 2025.