GILLETTE — Despite pushback from the Navajo Nation, Navajo Transitional Energy Co. is committed to being the nation’s third-largest coal producer and will continue to operate three Powder River Basin mines.
The company bought the Antelope and Cordero Rojo mines in Wyoming and Spring Creek mine in Montana at Cloud Peak Energy Corp.’s bankruptcy auction in August. Since being named the winning bidder, the independent company owned by the Navajo Nation has been under fire from some in the tribe.
NTEC already owns and operates the Navajo Mine and a coal-fired power plant in New Mexico, but buying Cloud Peak’s assets, including the nation’s third-largest coal mine in Antelope, goes against the overall philosophy of the tribe, says Navajo Nation President Jonathan Nez and Vice President Myron Lizer.
“NTEC should focus more resources into transitioning their energy portfolio and develop renewable energy for the Navajo Nation,” Lizer said in a Tuesday press release announcing the nation’s decision to not financially back NTEC’s reclamation bonding for the Powder River Basin mines.
NTEC also negotiated for and bought the Cloud Peak mines without consulting with the Navajo Nation leadership, Nez and Lizer said.
“We will not support initiatives that attempt to circumvent or undermine the laws and policies of our Nation,” Nez said.
In a Wednesday afternoon press conference in response to the Navajo Nation’s decision to not back NTEC financially, company spokesman Steve Grey said the move does not scuttle the deal and that NTEC has acted in the interests of the nation.
“We always listen to what the Navajo people say,” Grey said. “Always, always. We have always told the Nation we would have a diverse portfolio, but at the same time, that portfolio has to generate revenue. Mining and power generation have a very high return on investment and a high amount of revenue.”
He said that buying the PRB mines doesn’t mean the company is all-in on coal only.
“We have assessed a number of alternative energy projects, and when we have presented them to shareholders, they’re kind of taken back when they see the return on investment,” he said.
Grey said NTEC anticipated it may have to secure up to $400 million in reclamation bonding without the tribe’s financial backing, and that those other options are now in play. That most likely will be using the profitable Navajo Mine as collateral.
“When we first were going forward and using the indemnity agreement (with the Navajo Nation) that we currently have at the Navajo Mine, we decided at that time … we wanted to make sure we had some other options,” Grey said.
With a 75-day clock ticking in Montana to secure bonding, Grey said NTEC is “proceeding as planned” and expects to have that taken care of before the temporary agreement with that state comes to an end.
“We can continue to operate,” he said, adding the more than 1,200 employees at the mines will “continue business as usual.”
Another of the Navajo Nation’s complaints with NTEC is that it didn’t learn of the company’s interest in buying Cloud Peak’s assets until after it had already happened.
“The Office of the President and Vice President did not learn of these acquisitions until NTEC issued a press release on Aug. 19,” the press release says. “This action alone is disrespectful of our Nation’s leaders and the interests of the Navajo people.”
Along that timeline, NTEC went through a confidential bidding process and was announced as the winning bidder Aug. 16. On Aug. 18, a U.S. Bankruptcy Court judge took less than 30 minutes, with no objections, to OK the sale.
Grey said he understands that may seem disrespectful to not keep the Navajo Nation in the loop of such a large decision and acquisition, but because of the legalities surrounding the closed bidding process, NTEC was prohibited from disclosing any details.
“What was really different in this (process) … was the fact that these assets were acquired through the federal bankruptcy process, and in that process we had to sign some nondisclosure agreements,” Grey said. “As soon as we knew we had secured the bid, that is when we (notified) the nation that we were successful.”
Asked if any unrest within the Navajo Nation and its leadership could lead to scuttling the deal for the Cloud Peak mines or force NTEC to get turn them around and sell them again, Grey said that’s not a concern.
“It’s a done deal,” he said.