Farmington >> The $85 million sale of Navajo Mine from its parent company, BHP Billiton, to a tribal enterprise created by the Navajo Nation was completed Monday, according to a press release issued by BHP Billiton.
"BHP Billiton has completed the sale of Navajo Mine to the Navajo Transitional Energy Company, a Navajo Nation owned company established for the purpose of acquiring Navajo Mine. Final approvals from the Four Corners Power Plant owners and the Navajo Nation Council have been received and the transaction is effective 30 December 2013," the press release states.
Pat Risner, New Mexico Coal Division Asset President for BHP Billiton, said the coal company is pleased that Four Corners Power Plant owners, the Navajo Nation and NTEC agreed to move forward and worked to complete the transaction.
"This is great news for the employees, communities, and all stakeholders that derive benefits from Navajo Mine and the Four Corners Power Plant," Risner said.
NTEC does not have assets at this time so BHP Billiton will loan NTEC the money to purchase the mine and over the next three years NTEC will repay the loan from the profit generated from the mining operation, Risner said.
With the sale completed, mining activity would continue at the mine -- which is the sole supplier of coal to the Four Corners Power Plant -- for at least 15 years after the tribal enterprise takes control of operations in 2016.
Employment opportunities will continue at both the coal mine and power plant along with a revenue stream for the Navajo Nation, according to the press release.
The tribe created NTEC in April to enter, execute and perform agreements to acquire and own Navajo Mine, according to the legislation that established the company.
Last week the Navajo Nation Council passed legislation to allow legal challenges related to the mine to be tried in state rather than tribal courts as part of the process for NTEC to obtain performance and reclamation bonds from Zurich American Insurance Company and Arch Insurance Company.
After the council approved the measure, 17 in favor and 5 opposed, it was later signed by Speaker Johnny Naize and Navajo Nation President Ben Shelly.
Lori Goodman, a member of the Navajo environmental group Diné CARE, said the council's action and the mine purchase were not done with the best interest of the Diné people and labeled it a "risky endeavor."
"At the end of the day, what they have done is morally and ethically wrong," Goodman said.
She mentioned that the voices of the people were heard and broadcast live on AM station KTNN during a public gathering outside the council chamber in Window Rock as the Dec. 27 special session took place inside.
"We heard from the people loud and clear," she said.
Navajo Mine will continue to supply coal to the Four Corners Power Plant, which is owned by Arizona Public Service Co.
APS spokesman Damon Gross said power plant owners have executed a long-term coal supply agreement with NTEC that begins in July 2016, when the current coal supply agreement expires, through 2031.
"Securing the coal contract was a necessary step in completing the transaction," Damon said.
Also on Monday, APS completed its purchase of Southern California Edison's ownership of units 4 and 5 at the Four Corners Power Plant for approximately $182 million.
Acquiring units 4 and 5 was originally announced in November 2010 and will require installation of additional emission controls to fall into compliance with clean air standards set by the U.S. Environmental Protection Agency.
APS also permanently closed units 1, 2 and 3 in a ceremony for plant employees on Monday.
"Decommissioning work, including complete dismantle and removal of the older units and any associated structures, will begin immediately and is expected to last about three years," according to an APS press release.