North American Coal unit to operate Navajo mine in New Mexico

NACCO Industries (NYSE: NC) announced Dec. 9 that Bisti Fuels Co. LLC, a subsidiary of its North American Coal Corp., has entered into a 15-year, cost-plus Contract Mining Agreement with Navajo Transitional Energy Co. LLC (NTEC).

Under the agreement, Bisti Fuels will act as the contract miner at NTEC’s Navajo Mine, a surface coal mine located within the Navajo Nation near Fruitland, San Juan County, New Mexico. Production is expected to be approximately 5.9 million tons of coal per year.

Under a separate agreement, NTEC will deliver that coal to the third-party owners of the nearby Four Corners Generating Station. Similar to most of North American Coal’s other agreements, the agreement between Bisti Fuels and NTEC is a cost-plus arrangement, under which NTEC will pay Bisti Fuels’ costs and a profit margin per ton.  

The agreement consists of a transition period and a production period. During the transition period, which will commence on Jan. 1, 2016, Bisti Fuels will transition into the contract miner role. The production period is scheduled to commence when NTEC completes a pending commercial transaction with the existing contract miner, which is expected to occur during the second half of 2016. 

NACCO Industries, headquartered in Cleveland, Ohio, is an operating holding company with subsidiaries in the following principal industries: mining, small appliances and specialty retail. North American Coal mines and markets steam coal for use in power generation and provides selected value-added mining services for other natural resources companies.

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.