Westmoreland Coal Company miner
Heartland Generation Ltd., private subsidiary of Energy Capital Partners
Tonnage based electrical coal royalty with no commodity price exposure
|2020 Royalty Revenue||C$5.7 million|
|Annual Production Capacity||3.3 million tonnes of thermal coal|
|Estimated Decommissioning Year or Royalty End||2021|
The Sheerness Mine is located approximately 160km northeast of Calgary, Alberta. Operations commenced in 1986 and currently have an annual production capacity of 3.3 million tonnes of thermal coal. Coal is delivered by road from the open pit mine to the Sheerness power station, which is adjacent to the mine.
The power station is comprised of two power generating units with total capacity of 760MW. Units were originally expected to be decommissioned in 2036 and 2040, respectively; however, the government has mandated a shut down of coal-fired electricity generation by 2030. Altius expects royalty revenue from Sheerness to end in 2021, based on assumptions regarding mining sequencing moving off royalty lands. Altius commenced legal action against the federal and provincial governments in 2018, arguing that the action taken by the governments is tantamount to expropriation. This action is ongoing in 2020. The revenue reported prior to July 2020 was based on the original share of a Joint Venture with partner Liberty Mining & Metals Holdings, LLC ("LLM") where Altius held 52.4%. In July, Altius reported its acquisition of LMM's interest, to hold 97.3% going forward. The acquisition has no impact on the ongoing litigation.