DEQ has denied operating license to Spring Creek Mine owner Navajo Transitional Energy Company. NTEC is wholly owned by the Navajo Nation. Concerned that the tribe will not support mining bonds with its full faith and credit as NTEC takes over Montana and Wyoming coal mines it purchased this month at a Cloud Peak Energy bank auction.
Supporting mint bonds would require the Navajo Nation to waive sovereign immunity, something it has not done, and continue to debate, even when NTEC sought DEQ if it allowed this week. The company has sent most of its 300 Spring Creek workers home until the dispute is resolved, although it did not say when it might be.
Without the waiver of the tribe's sovereign immunity, it becomes difficult for regulators to sue over any problems at Spring Creek or to collect for environmental obligations.
Shaun McGrath, director of DEQ, said that NTEC had not responded to Montana's insurmountable concerns until late last week. These concerns remained unresolved as NTEC took control of the mine on Wednesday.
"Some of the challenges we have are unfortunately NTEC engaged with us on the issue of sovereign waivers just last week," McGrath said, adding, "We have every expectation that we will work through these issues." [1[ads1]9659003] NTEC put on DEQ to allow the mine and keep Spring Creek workers at work.
"We are shocked and disappointed that the state is taking this position and jeopardizing the future of Spring Creek," said Tim McLaughlin, NTEC chairman, in a statement Thursday. "We have done everything in our power to assure the state that we will operate according to their laws, but we simply cannot consent to the complete waiver of the rights preserved in our treaties. To do so would put the foundation of the Indian country at great risk. ”
Meanwhile, lawyers for the Navajo Nation raise concerns about the tribe's financial risk associated with NTEC's new mines. Gallup Independent reports that the Navajo Department of Justice and the Navajo Nation Controller are concerned that mining recovery bonds pose a $ 1 billion risk to the Navajo Nation if NTEC cannot cover recovery costs. This money was due to bail companies.
Navajo Nation has supported NTEC's acquisition in the past. In 2013, the Navajo Nation Council voted to use the nation's full faith and honor to secure bonds for Navajo Mine, NTEC's first mining acquisition.
At a meeting Wednesday, some council members accused NTEC of trying to use the limited 2013 waiver of sovereign immunity as a "back door" to insure bail companies Navajo Nation would secure bonds for Cloud Peak assets, too. Council members discussed driving home to NTEC that the tribe would not automatically support new mining bonds, without two-thirds majority approval by the council.
Like the DEQ, the Navajo Nation Council faced suggestions that it would be responsible for my closures if it didn't play ball. Councilman Carl Slater was not persuaded.
"We as a nation have to assert ourselves. For a long time, we have just been scared off and rolled over. That is not true. Because business is looking at us and they are looking at the decisions we make. And they know they can support us into a corner and force us to make a hasty decision, "said Slater, during Wednesday's video streaming session.
"We cannot be on the hook for this acquisition to ensure that hundreds of people in Wyoming are still employed," he continued. "Our backstory, our commitment with our financial resources must be on reservation and for our people."
The Council debate took place when NTEC took control of Spring Creek and two Wyoming assets, Cordero Rojo and Antelope Mines. Wyoming Mines continued to operate Thursday, in part because Wyoming allows mining companies to "sell bonds." Montana requires mining companies to be insured by federally recognized bail companies.
In Sheridan, Wyoming, the closest town to the Spring Creek mine, the miners contacted State Rep. Cyrus Western and asked him to do something to keep the mine open. Most of the Spring Creek miners live in the Sheridan area, says Western, a Republican. It is Sheridan who will feel the financial blow of a long-term closure.
"All the employees received an email stating that the permit transfer was denied and you were given additional advance notice," Western said. "I think there's a lot of disbelief. There have been green lights all over Wyoming, and this is a huge shock, because Montana's permit process is different."
announce the Spring Creek closure on Thursday, NTEC said it had agreed to a partial waiver of sovereign immunity so that the mine could be regulated under Montana law, but that was not enough. After the waiver of sovereign immunity, the bond issue still needs to be resolved.
The Navajo National Council set out Wednesday without deciding what to do to use government credit to receive Cloud Peak assets. Council members instructed tribal lawyers to investigate the matter in advance of a council vote within 30 days.
Spring Creek Mine is located in southeastern Montana, about 35 miles from Sheridan. The mine produces 10 million tons of coal a year from a coal seam that is 80 feet thick. Customers are in the Northwest and Midwest, according to data provided by the former owner Cloud Peak Energy. It was Cloud Peak's top positioned mine for exporting coal to the Asian power plants via the Westshore terminal in British Columbia.
The non-skilled mine is just outside the Crow Indian Reservation. In addition to buying Spring Creek, NTEC has development rights to the proposed Big Metal Mine, for which Crow has the mineral rights.
Crow Tribal Deputy Carlton "Duke" Goes Ahead has written Montana Democratic Prime Minister Steve Bullock on behalf of NTECs, asking "Montana State to maintain consistency in their relations between the tribes and extend NTEC the same committee and respect it has shown to the tribal states that are in the state. "