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Navajo-owned coal company wins liability waiver from Wyoming

CHEYENNE, Wyo. (AP) — Wyoming officials have reached an agreement with a Navajo tribal company that would give them authority to take the company to court as a way to enforce environmental laws at two coal mines.

The agreement shows Navajo Transitional Energy Company's "serious and long-term commitment" to Wyoming, Gov. Mark Gordon wrote Thursday in a letter to NTEC CEO Clark Moseley.

"I look forward to a long and productive future for NTEC in our state," Gordon added.

NTEC acquired the Antelope and Cordero Rojo mines in Wyoming, and the Young's Creek mine in Montana, from Gillette-based Cloud Peak Energy in a 2019 bankruptcy sale.

The company argues that NTEC is a tribal division and therefore a sovereign entity that cannot be sued in state court. Litigation is often a key tool to enforce many environmental laws.

Wyoming and Montana officials have been negotiating limited waivers of sovereign immunity for NTEC as a condition for the company to eventually get state permits for its new mines.

The company also would need to secure bonds for the mines, something it has yet to do after the Navajo Nation announced in November it wouldn't financially back the bonds.

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Such support would be risky and the tribe should get away from investing in coal, Navajo Nation President Jonathan Nez said at the time.

For now, Cloud Peak's $370 million in bonding remains in place for the three mines while NTEC seeks its own bonding.

Tribal officials didn't immediately respond to a message seeking comment on the waiver agreement.

Montana officials continue to negotiate a potential sovereign immunity waiver with NTEC. In January, they granted NTEC a 65-day deadline extension for that process, keeping the Young's Creek mine open until at least mid-March.

Cloud Peak's bankruptcy and sale of its mines were part of a tumultuous year for the Powder River Basin coal industry as utilities increasingly rely on gas-fired power plants and renewable sources to generate electricity.

In October, an affiliate of Jasper, Alabama-based FM Coal bought the Eagle Butte and Belle Ayr mines near Gillette from Milton, West Virginia-based Blackjewel, which shut down the mines after filing for bankruptcy in July.

The purchase allowed many of the 500 furloughed employees to return to work.

In June, St. Louis-based coal giants Peabody Energy and Arch Coal announced they would merge operations in the basin as a cost-saving measure.