Navajo council votes to move forward on coal mine acquisition

During a special session held on Oct. 16, Navajo Nation Council members voted 17-2 in favor of spending $4.1m on initial and immediate costs and obligations associated with the completion of ongoing negotiations and to close on an acquisition of Navajo coal mine from international mining firm BHP Billiton.

Legislation sponsor Council Delegate LoRenzo Bates provided assurances that the mine acquisition would be a successful venture, including the proven track record of BHP Billiton and sole customer the Four Corners power plant to generate and burn coal for electricity, the “dedicated” and “skilled” workforce already in place at both sites, the Navajo Nation’s nearly one-hundred years of coal supply, and that technology will continue to advance to provide cleaner methods of coal energy production.

“Technology will show that in some point in time, coal will become a much more valuable resource. There is a future for coal,” said Bates in an Oct. 17 statement.

Council Delegate Danny Simpson said he supports “green” energy development, while noting that the nation would lose $70m-$80m annually, including one-third of revenues for each of the Nation’s 110 chapters, if the Navajo mine and Four Corners plant closed. “I’m pro-green but there has to be a transition,” said Simpson. “It’s not going to happen overnight and it’s not going to happen two years from now.”

The bill now goes to President Ben Shelly for review and consideration.

Four Corners has five coal units with a total capacity of 2,060 MW. Units 1, 2, and 3 at are owned by Arizona Public Service (APS), which serves as the facility operator, and are each rated at 170 MW (Units 1 and 2) and 220 MW (Unit 3). Units 4 and 5 are each rated to a capacity of 750 MW, and are co-owned by six entities: Southern California Edison (48%), APS (15%), Public Service Co. of New Mexico (13%), Salt River Project (10%), El Paso Electric (7%) and Tucson Electric Power (7%).

APS has said that, if its currently delayed purchase of Southern California Edison’s interests in Units 4 and 5 at Four Corners is consummated, it will close Units 1-3 at the plant to reduce air emissions. These events will change the plant’s overall generating capacity to 1,540 MW and APS’s entitlement from the plant from 791 MW to 970 MW. Those shutdowns would mean a reduced market for the Navajo coal.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.