Crow tribe leases 145 million tons of coal

2013-04-11T15:11:00Z 2013-04-13T14:31:04Z Crow tribe leases 145 million tons of coalBy SUSAN OLP solp@billingsgazette.com The Billings Gazette
April 11, 2013 3:11 pm  • 

CROW AGENCY – The new Crow Tract I lease, formalized during a ceremony on Thursday, will mean millions of dollars to the Crow Tribe and a longer life for the Absaroka coal mine.

Hundreds of tribal members gathered at the Multipurpose Building in Crow Agency to watch tribal leaders and representatives of Westmoreland Coal Co. sign the documents. The ceremony included speeches, music, prayer and a lunch afterward hosted by Westmoreland for as many as 600 people.

Representatives for Sens. Max Baucus and Jon Tester, as well as Rep. Steve Daines also read letters offering their congratulations.

Tribal leaders donned ceremonial headdress for the occasion. Intricately beaded items decorated the stage where the speeches and the signing took place.

The agreement involves an estimated 145 million more tons of Rosebud McKay coal, located adjacent to the Absaroka mine. The area covers an estimated 14,000 acres in Treasure and Big Horn counties.

The lease, subject to approval by the Bureau of Indian Affairs, will allow Westmoreland to control 357 million tons of coal reserves and resources.

It is worth $12.5 million in bonus and advance royalty payments to the tribe over the next four and a half years. That’s crucial because a majority of the tribe’s annual operating budget, along with per capita payments to tribal members, come from Westmoreland coal royalties.

The agreement also offers hiring and contract preferences for tribal members.

Chairman Darrin Old Coyote, who made some of his remarks in Crow, spelled out the details of the lease to his audience. He then asked tribal members who work at the mine to stand up.

“The largest percentage of the budget of the Crow Tribe, and the per-cap you get three times a year, comes from the hard work of these gentlemen,” Old Coyote said.

As the tribe works toward economic sustainability, the income it derives from the coal operation and the jobs that accompany it will continue to be important to members, he said. The tribe is also working with tribes in the Northwest on opening avenues to export coal to Asian markets.

“All these good days will continue if we open up those ports,” Old Coyote said.

The tribe is also working with partners in clean-coal technology to re-energize the Many Stars project, which has been dormant for several years.

Old Coyote praised the tribe's partnership with Westmoreland. He also thanked tribal legislators for their work in securing the lease.

“This never would have happened without the legislative branch,” he said. “They were part of the process all the way through.”

Westmoreland President/CEO Bob King said the additional coal reserves could extend the mine’s life another 20 years.

“Our hope is to increase our production over what it is now,” he told the crowd. “With higher production our costs decrease and we can be competitive. The bottom line is we have to be competitive with the Powder River Basin in Wyoming.”

The mine employees 118 people, and two-thirds of the workers are members of the tribe, he said. Miners make an average wage of $65,000 a year, with benefits.

By the end of the year, King said, the company hopes to add an additional 30 workers. That hinges on whether Sherco, a coal-fired power plant 45 miles northwest of the Minneapolis-St. Paul, which Westmoreland supplies, is fully operational.

King said the plant lost one of its units in a catastrophic turbine failure, but is expected to be back online in September.

“I’m committed to increasing mine production and I’m committed to increasing jobs for the Crow Tribe and in the region,” he said.

Up until now, Westmoreland has shipped its coal east, but a rail spur under construction will allow its coal to go west, King said.

“That opens markets that we would not have been able to access, and hopefully even it will open export markets in the long term,” he said.

The company has a solid domestic market, King added, and that’s where Westmoreland will concentrate its efforts. But if infrastructure is put in place to allow coal to be shipped to Asian markets, Westmoreland said, he “is excited about that potential.”

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