By Chuck Slothower
FARMINGTON The Navajo Nation's agreement to purchase Navajo Mine in Fruitland is raising questions from some activists and tribal members.
They complain the memorandum of understanding, signed with mining company BHP Billiton in December, was reached with little consultation from tribal members and with few details of a long-term plan.
"The recent decision by Navajo Nation to purchase the Navajo Mine undermines all community commitments that BHP has made for stakeholder involvement in communities impacted by their operations," said Dailan Long of Burnham. "It is beyond my comprehension that Navajo tribal leaders would choose to assume fiscal responsibility for 50 years of coal operations, resultant coal ash waste and other associated legal liabilities."
Under the agreement, BHP Billiton would continue to operate the mine until July 2016. At that point, the Navajo Nation would take over with its own company, or another company of the tribe's choosing. Mine employees would continue stay on with the new operator.
Financial terms were not disclosed, but the transaction is to be structured as a stock sale. BHP Billiton and the tribe hope to have a final deal inked by April 2013.
BHP Billiton and Navajo Nation officials say the agreement will preserve about 800 jobs at the mine and adjacent Four Corners Power Plant.
"For BHP Billiton, it's not about the deal as much as sustaining Navajo Mine for all the stakeholders that depend on it," said Pat Risner, president of BHP Billiton New Mexico Coal. The company is San Juan County's largest private employer.
For the tribe, the deal represents a dramatic change. For decades, it has leased its land to BHP Billiton, a major mining firm based in Australia. Soon, the tribe will exploit for itself the rich coal veins that stripe the northeast edge of the sprawling reservation.
"In a larger sense, we're talking about Navajo Nation sovereignty, we're talking about owning our assets," said Erny Zah, spokesman for Navajo President Ben Shelly. "It's definitely a positive for Navajo to assert control and ownership of the natural resources that are on the Navajo Nation."
Tribal operation of the mine could open up new opportunities for the coal, Zah said.
Many questions remain unanswered, including how prepared the tribe will be to take over the mine in less than four years.
Representatives of DinŽ Care, a Navajo environmental group, said the decision was marked by a lack of transparency and public comment.
"I am devastated by the announcement because no information has been presented at the Burnham chapter or at local meetings," said Sarah Jane White of DinŽ Care. "With all kinds of potential risks,
downsides, and questions that we have about coal development, I believe that the Navajo Nation lacks the competence to sustain an economy based on coal. I am truly disheartened that the fate of me and my community has been predetermined without our input."
The mine is the sole supplier for Four Corners Power Plant, a 2,100 megawatt coal-burning plant. Plant operator Arizona Public Service Co. said it would pursue an agreement with the Navajo Nation to continue supplying the plant with coal.
"We've made significant progress on that contract with BHP and the Navajo Nation," said Damon Gross, spokesman for the Arizona utility. "We feel like a lot of the major hurdles are behind us."
The agreement pushes back the Arizona utility's plan to partially decommission the plant by the end of this year. APS now plans to close three of the plants five units in spring 2013.
"Our plan for the power plant is still in place," Gross said.
The mine and power plant stand to lose about 300 jobs after the decommissioning occurs in the spring. Officials at both companies say the job cuts will happen through normal attrition, not layoffs.