Navajo Nation forms company to run NM coal mine

FLAGSTAFF, Ariz. (AP) -- The Navajo Nation is moving closer to getting into the coal mining business.

Tribal lawmakers voted Monday to form a limited liability company that would run the Navajo Mine near Farmington, N.M. The tribe said it will decide by July 1 whether to purchase the mine from Australia-based BHP Billiton for about $85 million.

Navajo President Ben Shelly also must sign off on the creation of the Navajo Transitional Energy Co. LLC. Lawmakers said it would be part of a transition to renewable energy production in the future, though critics of the mine purchase don't believe that.

The Navajo Nation signaled its intent in December to take over the mine that produces between 6.5 million and 8.5 million tons of coal each year, feeding the Four Corners Power Plant in northwestern New Mexico. The plant's operator, Arizona Public Service Co., has said the production level will decrease when three of the units are shut down and it acquires majority ownership of the other two units.

The vote by tribal lawmakers was an "important and positive step in ensuring a long-term future for the plant," said Damon Gross, a spokesman for APS, which is owned by Pinnacle West Capital Corp. "We appreciate the Navajo Nation's careful consideration of this matter, and we're optimistic the plant will continue to support the Navajo Nation and the surrounding area with high-quality jobs that are economic drivers for the region."

The Navajo Nation owns and operates about a dozen businesses on the reservation, including a utility company, a transit system, a housing authority, radio stations, an oil and gas company, and shopping centers.

Lori Goodman, of the environmental advocacy group Dine CARE, doesn't want to see a coal mining company added to the list. She said she doesn't believe the Navajo Nation is serious about investing in renewable energy and the tribe should await the results of a federal study on the environmental impacts of the power plant and the mine before making any further decisions.

"We believe from Dine CARE that BHP is wanting to dump this mine on the unsuspecting Navajo Nation, because this is the first time in 50 years there will be an environmental assessment of everything," she said. "They're afraid, and they want to dump it before that comes up."

Craig Moyer, whose law firm was hired by the Navajo Nation to study the potential purchase of the mine, said the facilities at the Navajo Mine are old but well maintained. He sought to assure lawmakers that coal would remain a viable source of energy, though its use would eventually decline.

"This is likely to be one of the last coal plants out there," he said.

BHP will run the mine until 2016, when its agreement to supply coal to the power plant is set to expire. Moyer said final remediation costs will be covered by the plant's owners.

Tribal lawmakers saw the formation of the company to run a mine as an opportunity to gain control of resources on the reservation and ensure that the jobs and revenue that come with them are protected. The mine's coal has generated more than $40 million for the Navajo Nation, Shelly said.

Navajo Council Delegate Dwight Witherspoon said he is as concerned about the use of fossil fuels and their impact on the world and the climate. But he said, "for us to engage in the transition to more efficient or renewable type of energies, this provides us essentially with revenue to assist us in that transition."