November 13, 2019 Read More →

Navajo Nation president says NTEC is on its own in purchase of Powder River Basin coal mines

The Salt Lake Tribune:

The Navajo Nation will not financially back bonds a tribal energy company needs for a trio of newly acquired coal mines off the reservation, the tribal president said Tuesday, explaining that it’s too risky and his administration wants the company to move away from coal.

The Navajo Transitional Energy Co. recently bought Montana’s largest coal mine and two mines in Wyoming at auction after Cloud Peak Energy declared bankruptcy. The mines can keep operating for now because more than $370 million in reclamation bonds posted by Cloud Peak remain in place, state officials said.

Tribal President Jonathan Nez said he canceled agreements the energy company might have relied on to seek the Navajo Nation’s financial backing for the bonds. He said he wants to protect the tribe’s finances as revenues decline from the loss of a coal plant and mine on the reservation. Tribal lawmakers had been considering legislation to do the same thing.

The development marks the latest turmoil to hit the Powder River Basin of Montana and Wyoming, the nation’s largest coal producing region, where bankruptcies and declining demand have put a pall over a once-vibrant industry. Hundreds of people in the region were put out of work for months after another bankrupt company, Blackjewel, drastically scaled back operations at two of the biggest coal mines in the U.S.

The tribal energy company was created in 2013 to buy a coal mine in New Mexico on the reservation. It also owns a 7 percent stake in the nearby Four Corners Power Plant. While it was organized under the tribal government, it operates independently. Nez said the legal documents creating the company gave the tribe’s executive branch unilateral authority to administer what are known as general indemnity agreements. He said the bonds in place for the Navajo Mine and the Four Corners power plant won’t be affected by his decision.

The Cloud Peak deal made the Navajo company the third-largest coal producer in the U.S. The deal covers Wyoming’s Antelope and Cordero Rojo mines and Montana’s Spring Creek mine. About 1,200 people are employed at the mines, which combined produced almost 50 million tons of coal last year. Antelope is the third-largest coal mine in the U.S., while Spring Creek ranks eighth and Cordero Rojo is 11th.

More: Navajo leader: Tribe won’t back energy company’s new mines

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