The Atrum Coal Ltd (ASX: ATU) share price is having a terrible day's trade after the company ended a trading halt with bad news this morning.
The coal mining company announced that the Alberta Government has reinstated a coal policy that affects the ASX-listed company's flagship Elan Hard Coking Coal Project. Atrum also announced a number of changes to its board.
At the time of writing, the Atrum Coal share price is down a whopping 85%, trading at 6.1 cents.
Let's dig deeper into the company's announcement.
Reinstated coal policy
The Alberta Government has reinstated a coal policy that it removed in 2020. As result, Atrum has paused all significant site-based activities at its Elan Project, including any planned future drilling.
Atrum Coal said the government had restricted surface mining in Category 2 lands. This means coal exploration at the Elan Project is banned until a new coal policy is created.
The company noted that any environmental studies needed to continue prior work and activities already approved under its 2020 Coal Exploration Permit would not stop.
It is beginning cost reduction measures, as it now predicts much lower levels of site activities in 2021.
Atrum Coal said that there had been exemptions in the past that allowed open-pit mining on Category 2 lands. The company is seeking advice on what conditions open-pit mining might be possible.
Commentary from management
Atrum CEO Andrew Caruso commented on the government decision, saying:
We fully accept the Alberta Government's reinstatement decision. We also welcome a consultation process that is rigorous, inclusive and transparent.
(Atrum Coal believes) such a process is precisely how all key stakeholders including First Nations, ranchers, local communities, industry and other land users can work towards a balanced, modern policy that makes Alberta a world leader in sustainable resource development.
Mr Caruso went on to emphasise that Elan mined hard coking coal (also known as metallurgical coal).
Unlike thermal coal, for which there are many alternative energy sources, there is no viable substitute for hard coking coal in the production of high strength and hardness carbon steel via the blast furnace route.
Steel is essential to modern life and socio-economic development, including in the construction of many of the renewable energy technologies and infrastructure that form the basis of the world's transition towards a carbon-neutral setting.
Changes to Atrum Coal's board
This morning's announcement also included mention of upcoming resignations from the company's board.
Both non-executive chair Chuck Blixt has resigned and will be replaced by non-executive director Glen Koropchuk.
Non-executive director George Edwards has also resigned, and Jeff Gerard and Anita Perry have been appointed as independent non-executive directors.
More disruption to the board is set to come, as another non-executive director, Charles Fear, has announced that he will not stand for re-election in 2021.
Atrum Coal share price snapshot
The company's share price opened this morning trading at a healthy 25 cents and took a turn for the worse after Atrum Coal ended its trading halt mid-morning.
Today's losses have plunged Atrum Coal's down again after a poor year so far on the ASX. Currently, its share price is down 77% year to date. It's also 65% over the last 12 months.
Atrum Coal has a market capitalisation of around $145 million, with approximately 581 million shares outstanding.
