New bill continues to question indemnity agreement for NTEC

Noel Lyn Smith
Farmington Daily Times
A coal hauler operates at the Cordero Rojo Mine, located approximately 25 miles south of Gillette, Wyoming.

FARMINGTON — A new bill is making a second attempt at preventing the Navajo Nation from being exposed to legal and financial liabilities for coal mine purchases made by the Navajo Transitional Energy Company.

The tribe issued a general indemnity agreement to NTEC when the company purchased the Navajo Mine in 2013. The agreement – which addresses performance and reclamation bonds for the mine and authorized a limited wavier of the tribe's sovereign immunity – has come under scrutiny in recent weeks, in light of three mines that NTEC purchased from Cloud Peak Energy in August.

Tribal officials have stated they were not informed about NTEC's decision to buy the Cordero Rojo and Antelope mines in Wyoming and the Spring Creek Mine in Montana and became aware of the purchase after NTEC issued a press release on Aug. 19.

Under applicable laws, mine owners and operators must have reclamation bonds in place to operate mines. The new bill states that the Navajo Nation understands that NTEC wants the tribe's financial backing on surety bonds for the three mines.

Delegate Carl Slater is sponsoring the bill. He is also the co-sponsor to a similar version introduced last month.

Slater said the concern is that the intent of the indemnity agreement approved in 2013 then amended in 2015 was only for the Navajo Mine purchase.

"When those agreements were set in place, they were specific to the Navajo Mine. When you read the legislation, it's specific to the Navajo Mine," Slater said in a Nov. 4 telephone interview.

NTEC said in a statement on Nov. 4 that it remains "committed to protecting the sovereignty of the Navajo Nation while operating NTEC as a business entity as established by Navajo law. Our recent successes as a business reflect favorably on the Navajo Nation and we look forward to more successes in the future."

The bill was posted on the council's website on Oct. 31 and was assigned to the five standing committees and to the council, where final authority rests.

Slater's bill is like the one that was introduced as an emergency legislation by Delegate Vince James.

The exception is that Slater's bill clarifies that the tribe would not terminate, reduce or discharge its obligation for $463 million in performance and reclamation bonds for the Navajo Mine and the Four Corners Power Plant.

Slater explained that the added language was requested by the Arizona Public Service Company, which owns the power plant.

James dropped his bill on the first day of the council's fall session on Oct. 18. It was subsequently tabled on Oct. 23 and for a period lasting up to 30 days.

There is now a petition for the council to meet in a special session on Nov. 8 to consider James' bill.

Nine delegates have signed the petition as of the afternoon of Nov. 4, according to the Office of the Speaker.

Thirteen or more delegates need to sign the petition for the special session to occur, according to tribal law.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 or by email at

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