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FARMINGTON — The Montana Department of Environmental Quality has granted another short-term extension to the Navajo Transitional Energy Company to operate its coal mine in southern Montana.

The extension for the Spring Creek Mine in Big Horn County in Montana was authorized on Jan. 7 and is valid for 65 days while the two parties negotiate a long-term operating permit under the Montana Strip and Underground Mine Reclamation Act.

The Spring Creek Mine was one of three coal mines that NTEC purchased last year from Cloud Peak Energy, which sold the properties as part of bankruptcy proceedings in federal court.

The Montana DEQ has been seeking since October that NTEC waive its sovereign immunity, which it holds as an enterprise under the Navajo Nation government, in order to enforce rules and requirements under the Montana Strip and Underground Mine Reclamation Act.

NTEC stated in a Jan. 8 statement that it "has agreed to be regulated by all applicable laws of the state of Montana. The outstanding issues are related to the complexity of NTEC's sovereign status."

Montana DEQ Director Shaun McGrath said in a press release that the department will continue discussions with NTEC to ensure the company's affiliation with the tribe is "duly recognized and respected, while also ensuring that the state-issued permits for the mine are fully enforceable, on par with any other coal mine operating under state laws."

"This is a unique and complex issue that requires us to be deliberate in our approach to avoid any unintended consequences. We appreciate NTEC's commitment to working through these issues with us," McGrath continued.

The Montana DEQ press release states the permit transfer also requires NTEC to secure more than $108 million in reclamation bonds and the mineral lease transfers for the Spring Creek Mine.

NTEC has been working toward obtaining such financial guarantees since Navajo Nation President Jonathan Nez terminated in November the general indemnity agreement the company used to acquire the Navajo Mine near Fruitland in 2013.

"We remain confident that we will meet all the requirements of the state laws of Montana for lawful and responsible mining, which includes having appropriate bonding agreements in place," NTEC stated on Jan. 8.

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

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