Tribe evaluates Navajo Mine deal

Feb 11 - McClatchy-Tribune Regional News - Chuck Slothower The Daily Times, Farmington, N.M.

Despite a report to the contrary, the Navajo Nation remains interested in purchasing Navajo Mine from BHP Billiton, said a spokesman for the tribe's president, Ben Shelly.

The deal announced in December hit a rough patch recently when Shelly cast doubt on whether the Nation would take over the mine.

"We've got to think due diligence," Shelly said during a tribal council session, according to a Jan. 30 Gallup Independent report. "Let me assure you of this now -- I'm not, at this point, in support of buying a mine."

Erny Zah, a spokesman for Shelly, said Friday the tribe is still looking into the deal.

"We're still interested in the mine," he said. "We're doing our due diligence investigation, and we'll see how it goes."

Shelly's reported comments to delegate Russell Begaye raised the ire of Pat Risner, president of BHP Billiton's New Mexico Coal operations, the Independent reported. Risner sent Shelly an email message reportedly saying, in part, Shelly's comments "are disappointing and create substantial risk to the transaction."

BHP Billiton spokesman Norman Benally said Friday the message was intended to be a "confidential email correspondence," and declined to provide a copy.

Shelly met with Risner two days later in Window Rock, Ariz., to discuss the matter, Zah said.

"The president assured him we are still interested in pursuing the coal mine," Zah said. "At this point, it's just an interest. We still need to know the nuts and

bolts."

Zah said Shelly is staying away from the negotiating table.

"He wants the experts in our nation to be on the negotiating team, not politicians," he said.

The Navajo Nation wants to complete its due diligence by the end of spring in order to close the transaction by July 1, Zah said.

BHP Billiton, an Australia-based mining company, announced in December that it had signed a memorandum of understanding for the Navajo Nation to purchase the coal mine west of Farmington.

Since then, the tribe has not said whether it intends to complete the purchase.

At issue are the purchase price, legacy costs such as cleanup, the state of the mine's equipment, labor agreements and other matters, Zah said.

"There are still a lot of details that need to be worked out," he said.

The mine provides coal to Four Corners Power Plant. Together they employ about 800 workers. The closed-door negotiations between BHP Billiton and the tribe leave many questions unanswered for local officials who are concerned about potential job loss.

"Nobody really knows what the Navajo Nation means when they say they're doing due diligence," said Mike Eisenfeld, New Mexico energy coordinator for San Juan Citizens Alliance, an environmental group.

"It's really important that this be a public process," he added.

Benally said he could not provide an update on negotiations.

"It continues to be evaluated," he said.

A labor dispute also threatens to cloud the deal. On Jan. 31, a union representing 450 coal miners rejected a contract offer from BHP Billiton.

Some job loss appears inevitable. In early January, Risner told San Juan County commissioners the company would cut about 100 jobs at the mine before the mine's midyear transfer to the tribe.

Risner said BHP would try to avoid layoffs, instead offering buyouts to many of the mine's employees who are past retirement age.

http://www.energycentral.com/functional/news/news_detail.cfm?did=27537778