NTEC denies reports of late tax payments
Navajo Transitional Energy Company Friday denied news reports stating the company is behind on federal and county mineral taxes for the three coal mines it recently acquired in Wyoming and Montana from Cloud Peak Energy.
Citing a document filed by the Department of Interior in the Cloud Peak Energy bankruptcy case, the Casper (Wyoming) Star Tribune reported Friday NTEC owes $10 million in unpaid federal taxes accrued from mining the three mines in September and October. It was also reported the company owes $9.8 million in county production taxes for the Antelope Mine located in Campbell County, Wyoming.
But, in a statement to the Times, NTEC said that is incorrect. The company stated it has made all royalty and tax payments since acquiring the Montana and Wyoming mines on Oct. 24.
When NTEC acquired Cloud Peak Energy, NTEC assumed approximately $93 million of unpaid tax and royalty obligations due from Cloud Peak Energy for its coal production prior to the transaction.
“Department of Interior’s filing on Jan. 16, 2020 is an effort by the agency to double down on receipt of delinquent payments accumulated by Cloud Peak prior to NTEC purchasing the mines,” stated NTEC.
The company stated it has an agreement with DOI to pay Cloud Peak’s past due fees in installments, and any back fees recovered directly from Cloud Peak through its bankruptcy will be credited against the NTEC’s payments.
In the Jan.16 court documents, the U.S. Interior Department explained royalties are due on the final day of each month in which coal had been produced and sold.
Royalties are usually 12.5 percent of the value of the coal produced by strip or auger methods and 8 percent of the value of the coal produced by underground mining methods.
NTEC says it made its first payment in December, pursuant to its agreement with DOI. The company says it has also entered into an installment agreement with the Office of Surface Mining and Reclamation Enforcement addressing approximately $4 million
of historic Cloud Peak Energy federal reclamation fees.
As for the county production tax debt of $9.8 million, NTEC stated the company continues to work with several counties and the states of Wyoming and
Montana to arrive at agreements which ensure that NTEC fully covers the historic Cloud Peak Energy liabilities assumed as part of the transaction as well as making full and timely payment of all obligations resulting from NTEC operations Oct. 24 and forward.
Earlier this month NTEC was granted a 65-day extension on the limited waiver of its sovereign immunity from the Montana Department of Environmental Quality.
On Oct. 25 the two entities first signed a 75-day limited waiver of sovereign immunity in order to reopen the Spring Creek Mine after having to shut it down briefly because it wouldn’t be able to operate without the waiver.
The Spring Creek Mine in Big Horn County, Montana, is one of three mines that Navajo Transitional Energy Company had acquired when they purchased Cloud Peak Energy Inc. The other two mines, Antelope and Cordero Rojo, are located in Wyoming. The extension will allow operations to continue at the Spring Creek Mine in Big Horn County, Montana, while the parties negotiate a long-term arrangement.