BHP Billiton has agreed to sell a New Mexico coal to the Navajo Nation as part of its ongoing efforts to reduce costs and exit smaller operations around the world.
The deal, which was postponed in June by proposed reforms to Arizona’s electricity market, will see the Navajo Nation invest US$ 85 million to purchase the mine to protect more than 800 jobs and revenue for the Native American group.
Keeping the coal revenues flowing
The mine produces up to 8.5 million tpa of coal for the nearby Four Corners power plant, which it has supplied for over 50 years. Last year, the mine generated revenue of US$ 40 million for the Navajo and, despite plans to shut down three of the generating units at the power plant, it and the mine should provide revenue of US$ 100 million/year through to 2013, said Craig Moyer, the Navajo’s lead lawyer in the deal.
The power plant supplies electricity to New Mexico, Arizona, California and Texas and is majority owned by Arizona Public Services Co.
“Pleased… to secure the future of the mine”
"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," said Pat Risner, BHP Billiton's New Mexico Coal division asset president in a press release.
Edited from various sources by Jonathan Rowland
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