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Montana grants 65-day extension for Navajo-owned coal mine

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CHEYENNE, Wyo. – A Navajo Nation company may continue operating a coal mine for two more months amid ongoing negotiations over the terms of a state permit, Montana officials announced Jan. 7 in granting an extension that keeps about 300 miners at work.

The Montana Department of Environmental Quality and the Navajo Transitional Energy Company have been negotiating how the department might be able to take the company to court over any potential environmental violations at the Spring Creek mine near Decker, Montana.

Without a waiver of immunity, the state might not be able to successfully sue the tribe as a sovereign nation.

The two sides have agreed to a 65-day extension of an earlier interim waiver of sovereign immunity, department officials announced.

The company acquired Spring Creek, and the Antelope and Cordero Rojo mines in Wyoming, from Gillette-based Cloud Peak Energy in a 2019 bankruptcy sale. The purchase made the Navajo Transitional Energy Company the third-biggest U.S. coal company.

Eagle Butte closed for two days in late October after Montana officials refused to issue the company an operator permit, putting about 300 miners—most from nearby Wyoming—temporarily out of work. The department and company agreed to an interim waiver of sovereign immunity while they negotiated the permit terms.

The interim waiver was set to expire Jan. 8. The extension will keep the mine from closing again while the two sides keep negotiating.

“What we have found is this is a really unique and complex issue with sovereign immunity. So we are having ongoing negotiations with NTEC over exactly what a limited waiver of sovereign immunity looks like, what would be appropriate,” Montana Department of Environmental Quality Public Policy Director Rebecca Harbage said.

While the two sides negotiate the company’s operator permit for Spring Creek, the department continues to work with the Navajo Transitional Energy Company on transferring Cloud Peak’s Montana mine permit to the company, according to the department.

The company would need to secure $108 million in bonding for Spring Creek to obtain the Montana mine permit.

Meanwhile, the company also would need to secure bonding and waive sovereign immunity to get a Wyoming permit for Antelope and Cordero Rojo, according to Wyoming Department of Environmental Quality officials.

As in Montana, Wyoming officials also have been discussing sovereign immunity with the company, Wyoming Department of Environmental Quality spokesman Keith Guille said Jan. 7.

The Navajo Nation has refused to back bonding for the company’s mines, forcing the company to look elsewhere for funding to be able to clean up the open-pit mines if they ever closed.

Cloud Peak’s bankruptcy and the company’s purchase of the three mines were among several major developments as declining demand roiled the Powder River Basin coal industry in 2019. Utilities have been turning to cheaper and cleaner-burning natural gas and renewable energy to generate electricity.

The bankruptcy of Milton, West Virginia-based Blackjewel in July furloughed about 500 workers until Eagle Specialty Materials, an affiliate of Jasper, Alabama-based FM Coal, bought the Eagle Butte and Belle Ayr mines in October.

Coal giants Peabody Energy and Arch Coal, both based in St. Louis, announced in June they would merge operations in the basin.

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