Navajo Transitional Energy Company takes on coal mining operations at Navajo Mine
FARMINGTON — The mining manager of Navajo Mine has changed from North American Coal Company to the Navajo Transitional Energy Company after the facility's contract mining agreement ended on Sept. 30.
NTEC transitioned into the management role on Oct. 1.
"Our business has grown and developed to a point where it is no longer necessary for NTEC to utilize a contractor miner at Navajo Mine," company CEO Clark Moseley said a news release.
North American Coal, through its subsidiary Bisti Fuels Company, signed a 15-year contract with NTEC, which owns Navajo Mine, in December 2015 and started managing in January 2017.
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The open-pit mine is located on the Navajo reservation south of Fruitland and is the sole supplier of coal to the Four Corners Power Plant.
North American Coal is part of NACCO Industries Inc., which stated in a news release earlier this year it received notification on June 17 that the mining agreement between Bisti Fuels and NTEC will end in September.
In response to questions on Oct. 1, NTEC said assuming operations was "always an anticipated outcome" and was "built into" the original contract with North American Coal.
"We appreciate NACCO's years of service, but it was always envisioned that NTEC would ultimately take over full operations at the mine," Moseley said.
In a filing on June 30 with the Securities and Exchange Commission, NACCO Industries said it "anticipated" NTEC will pay the company a termination fee of approximately $10 million.
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"NTEC will assume control and responsibility for operation of the Navajo Mine upon termination of the contract mining agreement. All liabilities, including mine reclamation, are the responsibility of NTEC," the filing states.
NTEC officials declined to comment about the payment on Oct. 1.
The same information was mentioned in a June 18 news release by NACCO Industries that explained Bisti Fuels assumed operation of Navajo Mine on Jan. 1, 2017 and between 2017 and 2020, Bisti contributed pre-tax earnings between $4.5 million and $5.8 million annually.
"Excluding the termination fee, the termination of the contract mining agreement does not materially impact NACCO's outlook for 2021, but it will have a material unfavorable effect on NACCO's long-term earnings," the release states.
This is the first time NTEC, which is an enterprise of the Navajo Nation, is fully managing operations at the mine – the company called it the culmination of many years of planning and effort.
"NTEC was formed by the Navajo Nation and one of its first tasks was to acquire the Navajo Mine. But the goal was always for NTEC to ultimately not only own, but also operate the mine," the company stated.
More than 390 people work at the mine and more than 85% of employees are Native American, according to NTEC.
Royalties, taxes and wages from the mine contribute more than $80 million to the Navajo Nation and its economy annually, the company stated.
Moseley said they expect a smooth transition for employees.
"We already have a strong relationship with the employees that will form a strong foundation as we transition to full NTEC operations at Navajo Mine," he said.
In addition to Navajo Mine, NTEC owns and operates coal mines in Montana and Wyoming.
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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