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Mont. tribe signs coal deal with Wyo. company

Published on NewsOK Modified: January 24, 2013 at 7:06 pm •  Published: January 24, 2013

CROW AGENCY, Mont. (AP) — Leaders of the Crow Tribe agreed Thursday to give a Wyoming mining company rights to lease an estimated 1.4 billion tons of coal beneath the tribe's land in southeastern Montana.

The deal with Cloud Peak Energy involves more coal than the U.S. consumes annually, and revives stalled efforts to expand mining on the impoverished, 2.2 million-acre reservation.

Cloud Peak is hoping to ship the fuel overseas, tapping into coal export markets that have become increasingly attractive to mining companies as domestic demand falters due to competition from cheap natural gas and other factors.

Cloud Peak will pay the tribe $2.25 million up front. Additional payments in coming years could add up to $10 million for the tribe in exchange for leasing and exploration rights.

Approval from the Department of Interior is required before the deal can go into effect.

"The hopes and dreams have always been there of the Crow people developing that area," Crow Chairman Darrin Old Coyote told a crowd of several hundred people gathered to witness the signing of the agreement in Crow Agency. "I ask that we all work together collectively as a tribe to push this project forward so we can all benefit from the massive natural resources we have as the Crow people."

The future mining project was dubbed Big Metal in honor of a legendary Crow figure by the same name.

The tribe's coal reserves are within the Powder River Basin, which accounts for about 40 percent of U.S. coal production.

Cloud Peak and other companies have been seeking to boost exports of the region's coal through West Coast ports. They face determined resistance from environmentalists.

Cloud Peak chief executive Colin Marshall said it could take five years to develop a mine that would produce up to 10 million tons of coal annually. Other mines are also possible in the leased areas, he said.

But whether anything gets built will be tied closely to the fate of pending coal port proposals in Oregon and Washington state, he said.

"If a coal port is developed, then this mine will go ahead and bring us the prosperity we are both looking for," Marshall said.

He added that without the option to export coal, Cloud Peak would have to find domestic buyers. That's a difficult prospect under current market conditions that have prompted many utilities to reduce their use of the fuel.

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