Montana’s Department of Environmental Quality approved the expansion of the Spring Creek Mine, an extension that could extend the life of the mine to 2031 and yield an additional 65 Mt (72 million st) of coal.

The Billings Gazette reported that the expansion of the mine owned by the Navajo Transitional Energy Company (NETC) should produce from $42 million to $59.5 million in taxes for the state, and keep mine employment at about 281 to 340 workers, environmental quality officials said in its record of decision and written findings.

The decision sets a $107,727 fee for 615 acres of lost habitat for sage grouse, an endangered species. The money would be given to the Montana Sage Grouse Oversight Team’s Stewardship Fund.

NTEC acquired the mine from Cloud Peak Energy, which went bankrupt in 2019. The ownership transition has been complicated because of the sovereign immunity NTEC is granted as a wholly owned subsidiary of Navajo Nation. DEQ briefly shut down the mine last October out of concern that NTEC’s immunity would prevent Montana from suing the company, if necessary, to enforce state environmental law. The state wouldn’t transfer the mine’s permit to NTEC without a sovereign immunity waiver and the sufficient bonding.

The sovereign immunity waiver provided by NTEC on March 12, cleared the way for the permitting process to advance. NTEC noted that Montana Gov. Steve Bullock had written that he was “satisfied the limited waiver protects the rights of Montanans” and directed “all agencies of the State of Montana to accept the waiver.”

Issues remain, however. The surety bonds for the mine are still being put up by Cloud Peak affiliate, Spring Creek Coal LLC. And, Cloud Peak bankruptcy documents show that the companies holding the Spring Creek Mine reclamation bonds are concerned about getting their money, should the NTEC transition falter. In a move to assure Cloud Peak can still satisfy surety commitments, bond holders have asked that all other creditors not be allowed to collect administrative fees.

The mine expansion approved has been years in the making. Cloud Peak first applied for the expansion in 2013. At the time, coal was the largest source for electricity generation in the United States, with a 40 percent energy share. There were 781 Mt (860 million st) of coal burned in the United States for electricity generation in 2013, according to the U.S. Energy Information Administration.

The approval of the mine expansion comes as national demand is contracting.