Navajo Transitional Energy Co. LLC finalized the acquisition and took possession on Oct. 23 of three Powder River Basin coal mines as part of a deal struck with Cloud Peak Energy Inc. but has already run into a work-stopping issue at one of the mines.
After purchasing the mines in a bankruptcy auction, Navajo Transitional Energy, or NTEC, planned to retain the existing workforce at all three mines and hoped for a seamless transition.
However, the company hit an impasse with the Montana Department of Environmental Quality over sovereign immunity issues that "resulted in the immediate and indefinite shuttering of operations at Spring Creek mine," according to an Oct. 24 news release from NTEC. The company said state regulators demanded a full waiver of sovereign immunity from NTEC to continue to operate the Spring Creek mine.
"We are shocked and disappointed that the state is taking this position and putting the future of Spring Creek at risk," NTEC Chairman Tim McLaughlin said in the statement. "We have done everything in our power to assure 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."
NTEC said that as a wholly owned Navajo entity, it agreed to a partial waiver that allowed the company to be regulated by Montana under state laws. According to the release, Carlson Goes Ahead, vice chairman of the Crow Tribe of Indians wrote a letter Oct. 21 to Gov. Steve Bullock requesting the state maintain "consistency in its relations amongst tribes and extend NTEC the same comity and respect it has shown to tribal nations located within the state."
On the other hand, the company said operations at the Cordero Rojo and Antelope mines in Wyoming were "operating seamlessly."
Issues at Spring Creek are likely to add further uncertainty in the recently tumultuous Powder River Basin region, where 16 large mines provide a bulk of the nation's coal supply. Two mines owned by Blackjewel LLC, among the largest coal mines in the country, were shuttered suddenly in July when the company filed for bankruptcy and its initial attempt to finance the restructuring fell apart. The new owners of the mines, Eagle Specialty Materials LLC, only recently began calling workers back to the mines.
Arch Coal Inc. and Peabody Energy Corp., the largest two companies in the region, are currently in the middle of a regulatory approval process over a joint venture of their assets in the Powder River Basin and Colorado.
The Montana Department of Environmental Quality did not immediately respond to a request for comment.