Navajo Mine in negotiations for new operator

FARMINGTON — Navajo Transitional Energy Company officials confirmed on Wednesday that they are negotiating with a Texas coal company to manage operations at Navajo Mine beginning in 2017.

Following an Oct. 10 meeting, NTEC's board of directors selected North American Coal Company, based in Plano, Texas, to become mine manager and replace outgoing BHP Billiton, according to Erny Zah, NTEC spokesman, who was interviewed by phone on Wednesday. NTEC hopes to finalize contracts with North American Coal by the end of the year, Zah said.

The cost of hiring the Texas coal company to serve as mine manager will not likely be publicly disclosed even after contracts between the two companies are finalized, Zah said.

Representatives for North American Coal Co. could not be reached for comment on Wednesday.

Until then, BHP Billiton New Mexico Coal will continue in its role as mine manager until its contract expires at the end of next year, according to Dan Ware, BHP Billiton spokesman.

"We are the mine manager and we will remain in that role until the end of 2016," Ware said. "BHP Billiton is under contract to do so and the mine employees will remain BHP employees until then."

Ware said BHP Billiton would not comment on any contract negotiations between NTEC and prospective mine managers.

On Oct. 15, the Office of Surface Mining Reclamation and Enforcement released a Revised Environmental Assessment for the mine's Area IV North, which replaces an earlier assessment from 2012.

Zah said the findings of the revised assessment were expected.

"The question of alleged harm to (any) endangered species has been put to rest by OSM’s latest analysis," Zah said late Wednesday in an emailed statement. "NTEC is now able to move on and will continue to provide critical revenues and jobs for the Navajo Nation and Navajo people.”

Pat Risner, president of BHP's New Mexico coal program, said that while the environmental assessment was in process, production and delivery of coal from Navajo Mine to the Four Corners Power Plant was not disrupted and no jobs were lost.

Located on tribal land, Navajo Mine is the sole supplier of coal to the Four Corners Power Plant near Fruitland. It has provided sub-bituminous coal to the power plant for the last half-century. The coal-fired power plant, which is operated by majority owner, Arizona Public Service Company, is currently undergoing work to retrofit two of its remaining five units with pollution controls to meet federal haze rules.

Navajo Mine, which employs about 320 mine workers, produces about 5 to 6 million tons of coal each year, reaping millions for the Navajo Nation. Last year, the mine alone contributed nearly $25.2 million in coal royalties plus nearly $11.8 million in taxes to the Navajo Nation's general fund, Zah said.

In 2013, former Navajo Nation President Ben Shelly signed a resolution to buy the mine from BHP Billiton for $85 million. BHP Billiton will continue to manage operations at the mine until the end of 2015 and stay on for a year-long transitional process with the new mine manager until the end of 2016.

People can comment on the revised environmental assessment — available online at wrcc.osmre.gov — by submitting written comments by Nov. 16. Send them to Mychal Yellowman, OSMRE Western Region, 1999 Broadway, Suite 3320, Denver, CO 80202-3050. Call 866-847-7362 for more information.

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.