NTEC gets breath of air
Navajo Transitional Energy Company has gotten 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 signed a 75-day limited waiver of sovereign immunity — which means the company is no longer protected from lawsuits because of its tribally owned status — 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 NTEC had acquired when it purchased Cloud Peak Energy Inc. last year. The other two mines — Antelope and Cordero Rojo — are located in Wyoming, which has less stringent mining regulations.
The extension will allow operations to continue at the Spring Creek Mine while the parties negotiate a long-term arrangement. “We are committed to continuing our conversations with NTEC to ensure that NTEC’s affiliation with the Navajo Nation is duly recognized and respected, while also ensuring that the state-issued permits for the mine are fully enforceable, on par with any other coal mine operating under state laws,” said MDEQ director Shaun McGrath.
“This is a unique and complex issue that requires us to be deliberate in our approach to avoid any unintended consequences,” he said. “We appreciate NTEC’s commitment to working through these issues with us.” This agreement allows for NTEC and MDEQ to continue to work on reaching an agreement for a permanent transfer of existing permits, as well as secure more than $108 million in reclamation bonds and the mineral lease transfers for the Spring Creek Mine.
Tres Tipton, NTEC’s chief marketing and operations officer, said the agreement is needed for the state of Montana’s sake. He didn’t mention the Nation, although presumably if the mine stays open it will mean more dividends for the Nation’s coffers.
“We know Montana understands the value this mine provides to the region, including 200 family-wage jobs, approximately $30 million in Montana state taxes, and state land lease payments that fund education,” said Tipton. “Continuing our existing agreement allows for the uninterrupted production of high-quality coal and is in the best interest of the region, our employees and our customers.”
On Dec. 16 Clark Moseley, CEO of NTEC, sent President Jonathan Nez the required 10-day notice stating the company’s intent to approve a limited waiver of sovereign immunity.
“Throughout this process our administration has remained adamant about protecting the Navajo Nation’s financial portfolio and resources and we would caution NTEC to do the same as they proceed with their efforts to obtain bonds and permits,” said Nez to the Times. “When NTEC was created in 2013, the Council granted them the authority to waive sovereign immunity as long as they provide prior notice to the Nation,” he said. “We again call on NTEC to proceed with transparency and accountability to the Navajo people.”
In November, Nez terminated NTEC’s general indemnity agreement, after Council wasn’t able to make the decision on whether or not to terminate it. The agreement would have allowed NTEC to put the Nation’s assets up as collateral for obtaining bonds. Nez said at the time the move was because of the uncertainty the Nation’s portfolio and resources would be placed in if NTEC “proceeds with finalizing the bonds needed to operate these three mines using the Nation’s consent given in these indemnity agreements.”
NTEC had purchased Cloud Peak Energy Inc. after the company filed for bankruptcy. Critics of NTEC applauded Nez’s decision. “By terminating the Navajo Nation’s indemnity support for NTEC, Navajo leaders are wisely and responsibly protecting the Nation from NTEC’s ill-advised acquisition of bankrupt Cloud Peak mines,” said Karl Cates, Institute for Energy Economics and Financial Analysis. “Navajo leaders are shielding the Nation specifically from risks that include some $400 million in reclamation liabilities and from a weak business case that has been evident from the outset.”