The agreement to buy BHP Billiton Navajo Coal Mine was signed today, Oct. 31, 2013, which is also Halloween, by Navajo Transitional Energy Company, LLC, and BHP Billiton, That’s according to a BHP press release that I am posting with a web address.
According to a press release from Shiprock, N.M., Chapter President Duane “Chili” Yazzie, which he released yesterday, Oct. 30, BHP told him that the coal mine agreement would be signed today. I have posted Chili’s press release and a web address for the press release.
The sale price for Navajo Mine is $85 million, which is not mentioned by BHP. BHP also does not say how much NTEC, which is basically the tribe, will pay BHP for managing the coal mine until 2016. I asked BHP media contract Norman Benally about the management cost and Benally said that he would find out. He added that the amount that NTEC would pay BHP to be the mine manager might be “confidential.”
I also asked Benally if NTEC would be using the savings from no longer having to pay New Mexico state and federal taxes because of tribal status to pay BHP, which is loaning NTEC/tribe the $85 million to buy their mine. Or would NTEC/Tribe be using the annual coal royalities from the coal mine to pay back the $85 million loan? Or would NTEC/Tribe be using a combination of the coal royalties and taxes to pay back BHP?
Benally said he needed to talk with his supervisors before giving me an answer.
According to a BHP “Fact Sheet” on Navajo Mine,” in 2012, BHP paid NM more than $15.3 million in state taxes, more than $14.1 million in tribal taxes, and about $6.9 million in federal taxes. The coal royalties paid to the tribe was more than $32 million.
I also asked Benally if today’s coal mine purchase agreement also included a $4 million loan to NTEC for annual operating costs, which was separate from the $4.1 million that the Navajo Council approved and that President Shelly signed off on last week.
Benally said he needed to talk with his supervisors before giving me an answer.
Benally also confirmed that when NTEC and BHP signed the coal purchase agreement today, they also sign Exhibit G, the highly controversial amendment to NTEC’s plan of operation that allowed both NTEC and BHP to be free of all liabilities – past, present, future – associated with the coal mine.
During the Navajo Council Fall session, there was very heated debate over Exhibit G, which the Council’s Naabiki’yati’ Committee created during an hour long closed door discussion on Oct. 17 and quickly approved as soon as their executive session ended.
The amendments to NTEC’s plan of operation was proposed by Speaker Johnny Naize and Council Delegate Danny Simpson. NTEC’s initial plan of operation was approved by the Council approved in May and President Shelly signed off on.
As I was writing this blog, I missed a call back from BHP media contract Norman Benally. I telephoned his work phone and his cell phone and left messages and haven’t heard back from him. But as soon as he returns my messages, I’ll post his answers.
HERE ARE BHP MEDIA CONTACT NORMAN BENALLY’S ANSWERS VIA EMAIL:
· Is it true BHP will carry a Bond for NTEC to the tune of 4.1 million?
o The terms and conditions of the sale are subject to non-disclosure agreements.
· Is it true the Navajo Nation will be paying back the loan to BHP through State and Federal Taxes?
o NTEC will pay back the loan through cash flow generated from the mine.
Norman D Benally
(505) 330-7481 (Cell)
(505) 598-2253 (Office)
October 31, 2013
BHP Billiton and the Navajo Transitional Energy Company sign agreements for Navajo Mine Purchase
(Farmington, New Mexico) BHP Billiton and the Navajo Transitional Energy Company (NTEC) have today signed the final agreements for NTEC’s purchase of Navajo Mine.
New Mexico Coal Asset President Pat Risner, said: “BHP Billiton is pleased to have worked with the Navajo Nation to secure the future of the mine and the benefits it provides to the Navajo Nation, employees, communities, and other stakeholders.”
The next milestone for this transaction will be approvals by the owners of the Four Corners Power Plant (FCPP) by the end of November 2013. Following these approvals, the new Coal Supply Agreements covering to 2031 will be executed and ownership will be transferred to NTEC on 1 December 2013.
“BHP Billiton will remain as the manager and operator of Navajo Mine through to 2016 on behalf of NTEC. The mine will continue to be a significant contributor to the Navajo Nation’s and the Four Corners region’s economic base,” Mr Risner said.
The successful completion of the transaction will extend the life of the Navajo Mine and the FCPP for an additional 15 years to beyond 2015. This will deliver many benefits to stakeholders including:
• Continued direct employment of 800 people at the mine and power plant, generating a revenue stream that constitutes over 30 per cent of the Navajo Nation’s general fund.
• According to a recent study by Arizona State University, it will generate 2,069 direct and indirect jobs and result in an economic contribution of US$372 million each year in San Juan County for the period of 2016 to 2031. This represents a total economic contribution over the period of over US$5.5 billion.
Navajo Mine and its approximately 430 employees, 85 per cent of whom are Native American, have enjoyed 50 years of supplying fuel to the Four Corners Power Plant.
About BHP Billiton
BHP Billiton is a leading global resources company in which sustainable development is a key priority. We are committed to health, safety, the environment and the communities in which we operate. Further information
WEB ADDRESS FOR BHP PRESS RELEASE ON COAL MINE PURCHASE AGREEMENT
BHP FACT SHEET ON NAVAJO MINE
PRESS RELEASE: Contact Duane “Chili” Yazzie 505.860.4436
When BHP heard I was going to present a resolution to the Shiprock Chapter membership entitled “Stating an Objection to the Navajo Nation Council Approval to Grant BHP Mines a Waiver of all Liability in the BHP Navajo Mine Purchase by the Navajo Nation”, they asked to have a meeting with me on October 26, a Saturday. I met with them and we had a good meeting, very direct and respectful. They explained to me the reasons why the waiver language and I alluded to my concerns, I was upfront in saying that I was not qualified to talk legalese with them. We agreed to have a sit down where BHP reps and persons designated by the community would talk about the specific concerns point for point.
I had also told them very pointedly that I speak from a position of believing that the Navajo Nation and the people deserve more consideration from a company who for many years enjoyed paying a royalty rate of 25 cents a ton for coal. The company by having such a carte blanche deal has grown immensely wealthy, mining coal on Navajoland for over 50 years.
We agreed to meet on Wednesday, October 30 at the Shiprock Chapter House; NTEC and BHP are
scheduled to sign the agreement containing the waiver language on October 31. In making the final arrangements for the meeting I told them that Mr. Russell Begaye and some attorney friends would be at the table. BHP called me back later in the day and told me they would not meet with lawyer types, they said they would not talk about the legalities of the waiver language as “it was set already and they did not want to have DOJ say they were second guessing them”. Thus the meeting was called off.
I was confident that we would be able to have them recognize that there is/are problems with the waiver language, but we didn’t get the chance, as BHP walked away from the meeting. I had told them in our Saturday meeting that if, after our sit down we determine that all is in order, than business would carry on. I also said that if in the event that we do substantiate that there is a problem with the language, than it would be incumbent upon us to remedy the concern. Now we are stuck with this blanket waiver that releases BHP from all “known or unknown, suspected or unsuspected” past, present and future liability.
Shiprock, N.M., Chapter President Duane “Chili” Yazzie’s Press Release