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Navajo Nation moves to buy reservation coal mine

Published on NewsOK Modified: December 19, 2012 at 5:48 pm •  Published: December 19, 2012

FLAGSTAFF, Ariz. (AP) — The Navajo Nation is moving toward taking over a coal mine that supplies one of two power plants on the reservation, in an effort to preserve jobs and protect one of its top revenue sources.

The tribe and BHP Billiton announced Wednesday they've outlined terms that would put the Navajo Mine in the hands of the tribe in June. BHP would run the mine in northwestern New Mexico until 2016, when its agreement to supply coal to the Four Corners Power Plant is set to expire.

The Navajo Nation has an abundance of coal, but this would be the first time it has ventured into the coal mining business. The tribe previously has had outside companies mine its coal to fuel power plants and provide the resource to tribal members, who get limited quantities for free.

The revenue generated by lease payments and royalties makes up a huge chunk of the tribe's annual revenue.

Arizona Public Service Company runs the Four Corners plant. Rather than risking the possibility that the utility and BHP would not reach a new fuel supply agreement, the Navajo Nation has decided to run the mine itself. Navajo Nation Council Speaker Johnny Naize said the move would ensure a constant revenue stream to the tribe and preserve hundreds of jobs held mostly by Navajos.

BHP spokesman Norman Benally said a sale price has not been finalized. The Navajo Nation would create a company to run the mine and would cover the purchase with money from coal sales, tribal spokesman Erny Zah said.

The power plant provides electricity to about 300,000 households in New Mexico, Arizona and Texas and gets its coal solely from the Navajo Mine. The mine produces between 6.5 million and 8.5 million tons of coal each year, but that amount will decrease when APS shuts down three of the units at the Four Corners Power Plant and acquires majority ownership of the other two units.

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