Navajo coal company shuts coal mine in dispute over sovereignty

October 25, 2019

Production at the Spring Creek coal mine near Decker, MT was halted on Oct. 24 in a dispute over whether its new owner, Navajo Transitional Energy Company (NTEC), should be immune from future lawsuits for environmental violations or reclamation costs because the company is wholly-owned by the Navajo Nation and should therefore maintain sovereign rights.

The Navajo Transitional Energy Company blamed the state of Montana for the impasse while state regulators contended it was the company’s decision to shutter the mine. They said the state had been open to a short-term waiver of immunity so mining could go on while negotiations continued, the Associated Press reported.

But officials also made clear the company would not be approved to run the 275-worker mine over the long-term without a waiver of immunity.
“NTEC (Navajo Transitional Energy Company) will not operate Spring Creek until such a fully-effective, complete and approved waiver has been agreed upon,” wrote Matthew Dorrington, coal program supervisor at Montana’s Department of Environmental Quality.

The Spring Creek Mine is one of three in the Powder River Basin that NTEC acquired from Cloud Peak Energy. The acquisition, that made NTEC the third-largest coal producer in the nation, was finalized the same week as the shut down.

The Associated Press reported that the main area of disagreement between the state and company is a Montana law that allows citizens to file lawsuits over alleged violations of reclamation rules.

NTEC chairman Tim McLaughlin said in a statement that the company has “done everything in our power” to assure Montana officials that it would operate under state laws.

“But we simply cannot consent to a full waiver of the rights preserved in our treaties,” McLaughlin added.

The company is owned by the Navajo Nation but operates independently.

The Navajo Times reported that on Sept. 19, U.S. Department of Justice attorney April Quinn gave a presentation to the Naabik’iyati Committee in Window Rock, AZ in which she stated that upon review of the purchase agreement it showed that NTEC waived its sovereign immunity upon acquiring the bankrupt coal mines. She said all enterprises are supposed to inform the Navajo Nation of their waiving of sovereign immunity and NTEC never gave notice.

Spring Creek is one of the largest coal mines in the U.S. It produced almost 14 Mt (12.7 million st) of the fuel in 2018 for domestic power plants and shipment to customers in Asia, according to federal data.

NTEC also operates the Navajo Mine near the Arizona-New Mexico border that serves the nearby Four Corners Power Plant. The plant is one of three in the region that are scaling back operations as utilities shift toward natural gas and renewable energy sources.

Department of Environmental Quality spokeswoman Rebecca Harbage declined to release further details on what kind of immunity waivers were being sought. She cited the ongoing negotiations.

“We’re trying to figure out what a limited waiver would look like, so they can continue with full production and they are adhering to environmental laws,” Harbage said.

Photo: A haul truck is loaded with coal at the Spring Creek Mine. Credit, Cloud Peak Energy 

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