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Montana’s largest coal mine suspended operations Thursday, after a permitting impasse between the Montana Department of Environmental Quality and the Navajo Transitional Energy Company.
NTEC, owned by the Navajo Nation, finalized its purchase of the Spring Creek Mine and two other coal mines in Wyoming on Wednesday.
The Spring Creek Mine, the eighth-largest coal mine in the country, employs 250 workers, according to the Montana Coal Council. Located 35 miles north of Sheridan, Wyoming, Spring Creek is in the heart of the Powder River Basin, a coal-rich region spanning southeastern Montana and northeastern Wyoming.
An NTEC press release Thursday morning said that an impasse with DEQ over tribal sovereign immunity resulted in the “immediate and indefinite shuttering of operations at Spring Creek,” putting mine employees out of work. Operations continue at the two mines in Wyoming.
NTEC’s purchase of the mines from Cloud Peak Energy, which declared bankruptcy in May, was initially announced in August. The acquisition makes NTEC, which already owns one mine in New Mexico, the third-largest coal company in the United States. In bankruptcy court, NTEC agreed to pay $15.7 million in cash plus royalty payments on production and assumption of $40 million in high-priority debt for the mines. A bankruptcy court approved NTEC’s bid on Oct. 2.
Rebecca Harbage, public policy director for DEQ, said that conversations with NTEC about permitting are ongoing.
At issue is DEQ’s ability to enforce state laws against NTEC. Because NTEC is wholly owned by the Navajo Nation, the company has tribal sovereign immunity. That could allow NTEC to operate Spring Creek without following Montana’s environmental, remediation, and labor laws.
DEQ and NTEC have been discussing a waiver of the company’s sovereign immunity. NTEC said in the press release that “it has agreed to a partial waiver, allowing the company to be regulated by Montana under any and all state laws.” Harbage said DEQ is meeting with NTEC representatives Thursday.
“We are shocked and disappointed that the State is taking this position and putting the future of Spring Creek at risk,” said NTEC Chairman Tim McLaughlin in the press release. “We have done everything in our power to ensure the State that we will operate under their laws, but we simply cannot consent to a full waiver of the rights preserved in our Treaties — to do so would put the foundations of Indian Country at great risk.”
Harbage said the mine closure could have been avoided if NTEC had contacted DEQ earlier.
“This could have been avoided had NTEC engaged with DEQ early in the process on the topic of the waiver,” Harbage said. “DEQ notified NTEC of the requirements on Oct. 7 and followed up on Oct. 15. NTEC did not begin negotiations with DEQ on the subject of the waiver until this week, just days before closing on Cloud Peak’s holdings on October 24.”
On Monday, Carlson Goes Ahead, vice chairman of the Crow Tribe, sent a letter to Gov. Steve Bullock asking the state extend to NTEC the same “comity and respect” it has shown to the Crow and other tribes. As part of the purchase, NTEC acquired rights to the proposed Big Metal Mine on the Crow Reservation.
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In recent weeks, the Navajo Nation Council has questioned whether the purchase conforms with Navajo Nation laws, and the council is currently considering an emergency bill that would terminate NTEC’s general indemnity agreements.
“I am proud of the state of Montana for standing up to a mining company and saying you have to abide by Montana’s laws. That doesn’t seem unreasonable,” said Anne Hedges, deputy director of the Montana Environmental Information Center. “This is the state’s opportunity to protect itself in the long term.”
Hedges said NTEC should have delayed the purchase until the issue of tribal sovereign immunity was worked out.
“Right out of the chute, NTEC is making workers pawns in its games,” Hedges said.