Desperate for jobs and tax revenue, the Navajo Nation buys a coal mine. Community groups question whether the old owner, BHP Billiton, walked off with $85 million and left the Nation holding the bag.
The recent purchase of the Navajo Mine by the Navajo tribe is a perfect example of the power that fear of economic hardship holds over vulnerable populations.
Fear pushes communities like the Navajo Nation – with its more than 40% unemployment rate and 43% of the population living below the poverty level – to take desperate, short-sighted means to ensure continued income from an industry that effectively results in both their physical and cultural destruction.
That industry is coal, and it is an old, ugly story for the Navajo.
Recently the Navajo Nation paid $85 million to BHP Billiton for a coal mine that, according to the company, is no longer profitable. The back story to this sale is typical of such deals, in which global energy companies reap big profits while tribes pay with the health of their communities for the promise of a few years of reliable income for a small portion of the population.
“Buying the mine from BHP Billiton means responsibility for millions of tons of coal ash waste with toxic metals leaching into our aquifer and the San Juan River,” said Donna House of Diné Citizens Against Ruining our Environment (CARE), in an interview with Indian Country Today Media Network.
The mine, located near Farmington, New Mexico, employs about 800 people, mostly Navajos. It delivers $41 million annually for the tribe, about one third of the Navajo Nation’s annual general fund.
Navajo tribal President Ben Shelly celebrated the purchase. “We have secured a vital revenue stream for the Nation,” he told Indian Country Today.
The mine is expected to pay for itself within four years. The Navajo Mine is the sole supplier of coal to the Four Corners Power Plant, which executed a supply agreement through 2031 with the Navajo Transitional Energy Company (NTEC), according to Indian County Today. NTEC is a newly created tribal entity that purchased the mine and is responsible for operation.
However, not all the Navajo are celebrating. In fact, local grass roots activists banded together to sponsor billboards in the area calling attention to what they describe as lack of transparency and accountability of tribal leadership in the purchase of the mine. Diné CARE, Honor the Treaties and other community members are challenging tribal members to “Speak Up,” on a billboard erected this month on U. S. Highway 64, about 10 miles from Shiprockm, New Mexico.
The billboard states that the process for purchasing the mine was conducted without public accountability or transparency and describes the deal as blow to tribal sovereignty.
This last claim refers to a special agreement between the tribe and Zurich American and Arch, which insure the mine. The agreement waives sovereign immunity for the tribe and requires NTEC to settle any arbitration against the mine in New Mexico and Arizona courts. The tribe agreed to the insurance companies’ demands so that Zurich Amerian and Arch would issue $500 million in bonds and insurance for NTEC.
Interestingly, BHP Billeton, the previous owner, has agreed to continue operating the mine until 2016, when the company’s lease expires. But they will do so only if they receive a waiver against any past, present or future damage from the mine. The company has stated publicly that operating the mine beyond 2016 won’t be profitable for them.
“These guys at BHP are smart people,” notes Lori Goodman, Navajo, and member of Diné CARE.
Indeed, MiningNews.net reports that BHP’s worldwide productivity agenda is in full swing, assisted by its strategy of “portfolio simplification,” such as selling its Navajo Mine for $85 million to a bunch of desperate Natives focused on the short-term economic survival of their people.
Coal is not only a dirty business but one that is in decline with an uncertain future in global markets. The Four Corners Power Plant, currently the sole consumer of coal from the Navajo Mine, was recently sold to the Arizona Public Service Company by Southern California Edison Company. The California-based company sold the plant to conform to the state’s thrust to divest itself of coal and invest in renewable energy.
Duane “Chili” Yazzie, president of the Navajo Nation Shiprock Chapter (a unit of local government of the Navajo Nation), expressed concerns about this, as well as current criminal investigations underway for several council members. Navajo Nation Speaker Johnny Naize, the main sponsor for the bill creating NTEC, is under investigation for bribery and conspiracy.
Unfortunately, this scenario is not new for the Navajo Nation. In the 1950s several energy companies with their sights on Navajo coal banded together creating Western Energy Supply and Transmission Associates (WEST). They built massive coal and nuclear plants in the region fueled by Navajo coal and uranium, forcing relocation of thousands of Navajos and Hopis from their traditional lands in the process. The environmental and public health fallout has been enormous, including high cancer rates, respiratory illnesses, depletion and pollution of the scarce water supply.
Activist Winona LaDuke points to a National Academy of Sciences report suggesting that restoration of arid areas such as the Navajo Mine location is not possible. She further notes in an article for Indian Country Today that more than 50,000 people depend on drinking water from the Navajo Aquifer, which immediately adjoins the Navajo Mine area.
Jihan Gearon, executive director of the Black Mesa Water Coalition, a grass roots group, says it’s easy to see what is going on. “Even Navajo residents who are not organizers, just regular community people, can see what’s happening,” she told the Huffington Post last year. “Coal has made us economically dependent on our own cultural destruction.”
Mary Annette Pember is a freelance journalist and photographer who has written numerous tribal-affairs stories for the Daily Yonder. She also is a regular correspondent for Indian Country Today Media Network.