The Navajo Nation is considering a proposal to buy Navajo Mine, pictured here.
The Navajo Nation is considering a proposal to buy Navajo Mine, pictured here. (Daily Times file photo)
FARMINGTON — The Navajo Nation Council has approved legislation that will create a company charged with owning and operating Navajo Mine.

The tribe is still considering whether to buy the mine for a reported price of about $85 million.

BHP Billiton, an Australia-based mining company, announced in December that it was exploring the possibility of selling the mine west of Farmington to the tribe.

"We're creating a transition company that would ideally manage the operations, eventually, of Navajo Mine, should we decide to buy Navajo Mine," said Erny Zah, spokesman for Navajo President Ben Shelly.

The tribe has set a July 1 deadline to decide on the deal because of subsequent federal approvals that would be necessary.

"We're seriously looking into it," Zah said. "We're examining every amount of information that we can get, and going to determine from there how feasible this is for the Navajo Nation."

The Council approved the creation of the company, Navajo Transitional Energy Co., on Monday night. The legislation had not been forwarded to Shelly's office by Tuesday, Zah said. A number of late amendments may slow the process.

The Council's vote appears to be a major step as the tribe evaluates taking over the coal mine. Advocates say taking over the mine would preserve jobs at the mine and its customer, Four Corners Power Plant. Otherwise, both operations could close after 2016 when existing agreements expire.

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"The Council's decision is a significant step towards preserving the jobs for 800 families at Navajo Mine and Four Corners Power Plant for another 15 years, as well as sustaining an important revenue stream and flow (of) economic benefits for the region," Pat Risner, asset president of BHP Billiton's New Mexico Coal unit, said in a prepared statement Tuesday.

"The Navajo Nation Council has recognized the importance of owning a business that is important to the Navajo Nation community," Risner said.

The coal mine and adjacent power plant, located in Upper Fruitland west of Farmington, are major San Juan County employers and taxpayers.

Even if the tribe agrees to buy the mine, BHP Billiton plans to cut about 100 jobs through buyouts, retirements and normal attrition, Risner told county commissioners in January.

Critics question the wisdom of the tribe taking over a coal mine.

Lori Goodman, of the environmental advocacy group Dine CARE, said 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."

A draft of the legislation included a requirement that 10 percent of the Navajo Transitional Energy Co.'s net income go toward renewable energy. The energy company would be operated as a tribal enterprise, similar to Navajo Agricultural Products Industry and other companies backed by the Navajo Nation, Zah said.

Chuck Slothower can be reached at cslothower@daily-times.com; 505-564-4638. Follow him on Twitter @DTChuck.

The Associated Press contributed to this report.