Tribe to continue investigating Navajo Mine purchase

By Noel Lyn Smith
Navajo Times

WINDOW ROCK, April 4, 2013

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L egislation to authorize $2.3 million in supplemental funding to continue studying the tribe's possibility of purchasing Navajo Mine was signed Wednesday by Navajo Nation President Ben Shelly.

Navajo Mine is owned and operated by BHP Navajo Coal Co. and solely supplies coal to Four Corners Power Plant near Farmington.

In a special session March 29, the Navajo Nation Council passed the legislation to approve using $2.3 million in supplemental funding from the Unreserved Undesignated Fund Balance to continue the investigation with a vote of 14 in favor and 6 opposed after nearly two hours of debate.

Less than an hour after the Council passed the bill, it was submitted to Shelly's office for review and consideration.

Although the signed resolution has no letter from Shelly attached, the president has three issues he wants to see addressed, said Erny Zah, communications director for Shelly.

The president wants to know how overhead costs would be paid for should the tribe take over, that no politician be involved with managing the mine, and a plan to move toward clean coal, Zah said.

The president had up to 10 calendar days to sign the bill into law or veto or use the line-item veto authority, according to Navajo law. If the president did not exercise any authority within 10 calendar days, the bill would have automatically became law.

During the special session, LoRenzo Bates, who sponsored the legislation, said the results of the first phase of the investigation concluded that the tribe should consider buying the 30,000 acre coal mine, which would continue to generate revenue for the tribe and continue employment opportunities for tribal members.

The mine employs approximately 430 individuals and has been supplying coal to Four Corners Power Plant for 50 years.

Bates (Nenahnezad/Newcomb/San Juan/T'iistsoh Sikaad/Tsé Daa K'aan/Upper Fruitland) explained that while the coal belongs to the Navajo Nation, the tribe does not have the operational management, personnel or the equipment to remove it from the land.

By purchasing those aspects of the mining operation, the tribe would have those capabilities, he said.

Phase I of the investigation started after the Council unanimously passed a $750,000 supplemental appropriation from the UUFB in October to pay for the due diligence investigation.

In December, the tribe and BHP Billiton New Mexico Coal, which owns BHP Navajo Coal Co., signed a non-binding memorandum of understanding to negotiate the acquisition of Navajo Mine.

Under the terms of the agreement, BHP Billiton New Mexico Coal would continue to operate the mine until July 2016. At that time, the tribe could take over with its own mining company or select another company, but the mine employees and equipment would remain with the new operator.

The price tag for the mine could cost up to $85 million with a deadline set for June.

Much like the March 28 meeting of the Council's Naa'bik'iyati' Committee, delegates questioned the purchase and the need to supply additional money to continue the investigation.


Delegate Edmund Yazzie (Church Rock/Iyanbito/Mariano Lake/Pinedale/Smith Lake/Thoreau) attempted to have the legislation tabled with a directive to have a presentation about the possible acquisition made to delegates but it failed with a vote 5 in favor and 15 opposed.

Delegate Dwight Witherspoon (Forest Lake/Hardrock/Kíts'íílí/Piñon/Whippoorwill) motioned to have the consultants include identification of health impact studies related to coal mining in the Four Corners area. That motion passed with a vote of 16 in favor and 3 opposed.

Norman Benally, media contact for BHP Billiton New Mexico Coal, said the company is pleased with the Council's decision.

"The due diligence process will permit the Navajo Nation to conduct a thorough evaluation of Navajo Mine and will allow the Navajo Nation to make an informed decision whether to purchase the mine," Benally said.

The successful completion of the ownership transaction is important to extending the life of Navajo Mine and Four Corners Power Plant and would save 800 jobs along with continuing a revenue stream to the tribe's general fund, he said.

According to one of the findings of Phase I of the study, both Navajo Mine and Four Corners Power Plant would face closure by 2016 if the tribe does not acquire the mining operation.

Diné CARE is a community group that opposes the purchase and called the expenditure "needless and wasteful" because of the risks and liabilities associated with the mine.

Since the purchase of the mine is "as is," the tribe would be responsible for cleaning tons of coal ash waste and uncertainty surrounds the quantity and quality of the coal, according to a March 28 press release from the group.

"Diné CARE feels that BHP is wanting to jump ship," said Lori Goodman, a member of the group.

Goodman said another concern is the U.S. Office of Surface Mining's environmental review of proposed actions at Navajo Mine and Four Corners Power Plant.

Those actions are a power plant lease amendment that Arizona Public Service Co. executed with the Navajo Nation to extend the life of Four Corners Power Plant to 2041, right-of-way renewals for the existing transmission lines from the power plant, and a proposed new mine area within Navajo Mine to supply coal to the power plant for 25 years beginning in 2016, according to the OSM website.

The results of that review have yet to be determined and will not be until 2014, Goodman said.

Diné CARE thinks there are too many unanswered questions, Goodman said.

"They have such a muzzle on the Council delegates and the few who ask questions are not being answered, that's not right," Goodman said. "We're the stockholders, that's our children's future."

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