Powder River Basin

The Powder River Basin in Montana and Wyoming is home to three coal mines purchased by Navajo Transitional Energy Co. from bankrupt Cloud Peak Energy in August. NTEC assumed operation of all three mines after signing a temporary waiver of sovereign immunity with the Montana Department of Environmental Quality Oct. 25.

Montana's Spring Creek Mine resumed operation following an Oct. 25 agreement between Navajo Transitional Energy Co. and Montana's Department of Environmental Quality that allows NTEC to operate the mine under an interim waiver of sovereign immunity for 75 days.

NTEC, a company wholly owned but not controlled by the Navajo Nation, acquired the coal mine Aug. 19, along with the Antelope and Cordero Rojo mines in Wyoming, from the bankrupt Cloud Peak Energy. Sale of the assets in the region's Powder River Basin closed Oct. 23, and NTEC began operations at the Wyoming mines the next day.

Montana DEQ, however, prevented NTEC from operating the Spring Creek Mine until a dispute between the two entities regarding NTEC's sovereign immunity could be resolved. The regulators reached out to NTEC with concerns in early October, when the acquisition was approved during Cloud Peak's Chapter 11 bankruptcy proceeding, Rebecca Harbage, public policy director at DEQ, said in a phone interview. The regulatory agency was concerned, she said, that given NTEC's sovereign immunity as a Navajo Nation-owned business, the department could have difficulty enforcing Montana's laws and environmental regulations.

When DEQ learned NTEC wanted to operate Spring Creek on the existing DEQ permit, held by Cloud Peak doing business as Spring Creek Coal, the agency responded that it would require a waiver of sovereign immunity to allow such operations. DEQ received a draft waiver from NTEC on Oct. 21, Harbage said, leaving no time to avoid disruption of mine operations while negotiations took place.

The interim limited waiver of sovereign immunity agreement, signed by both parties Oct. 25, returned the mine to production. DEQ has "accepted NTEC as a contractor under the current permit and current bond" held by Spring Creek Coal, Harbage said.

In addition to complying with existing laws and permits, Harbage said, NTEC must apply to transfer those permits during the interim period in an effort to become the mine's official operator when the interim period concludes. The waiver may be extended upon mutual agreement of the parties after 75 days.

The waiver subjects NTEC's corporate directors, officers and agents to liability in connection with the mine's operation, but specifically excludes the Navajo Nation from any suggestion that it waives its own sovereign immunity. The interim waiver also prevents NTEC from employing Navajo Nation judicial proceedings in the event of a dispute and specifically directs the company to act in accordance with Montana rules and regulations, including the state's Strip and Underground Mine Reclamation Act.

NTEC posted a press release Oct. 24 referencing the dispute, then replaced it with an edited version emphasizing its position as the nation's third-largest coal producer with the acquisition of the Powder River Basin mines.

In addition to working with Cloud Peak's existing customers, described as electric utilities and industrial customers throughout the U.S., as well as in Canada and Asia, NTEC plans to significantly increase coal exports to international markets, the release says, taking advantage of export capacity at the Westshore terminal in British Columbia, which NTEC also acquired from Cloud Peak.

"We greatly look forward to working [with] all of our new partners to return these mines to profitability," NTEC President and CEO Clark Moseley said in the release. Moseley is a former senior vice president and vice president of engineering for North American Coal Co. NTEC's chief financial officer, chief operating officer and director of corporate development also have past or current management or executive positions in the coal industry, according to their LinkedIn profiles. NTEC plans to move its corporate headquarters from Farmington, New Mexico, near the border of the Navajo Nation, to Broomfield, Colorado, where Cloud Peak operated its Colorado offices, "in connection with its acquisition of the Cloud Peak assets," the release says.

NTEC, which was formed by the Navajo Nation in 2013 to purchase the Navajo Mine near Farmington, did not return calls seeking comment. It continues to operate the Navajo Mine, the exclusive coal supplier to the Four Corners Generating Station, in cooperation with contract miner Bisti Fuels.

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