CROW AGENCY — Representatives of the Crow Tribe and Cloud Peak Energy Inc. signed an agreement Thursday for the potential development of 1.4 billion tons of coal.
Hundreds of people in the Multipurpose Building in Crow Agency looked on as Crow Chairman Darrin Old Coyote and Cloud Peak CEO and President Colin Marshall signed the legal documents.
Under the pact, the Wyoming energy company will initially pay the tribe $2.25 million. Cloud Peak will pay another $1.5 million once the agreement is approved by the Department of the Interior, and then make additional annual payments through the initial option period, up to $10 million.
The exploratory phase is expected to take at least five years.
Whether Cloud Peak will actually develop a mine on any of the three coal deposits near its Northern Powder River Basin properties remains to be seen. Marshall said that could well depend on whether West Coast coal ports are developed.
The ports would open the way for Cloud Peak to ship coal to energy-hungry countries in Asia.
“If we get the ports, I’d say it’s very likely this will add up and work, and that’s my expectation,” Marshall said. “Without it, then it would depend upon the domestic market and how it develops.”
At the moment, he said, with restrictions on burning coal, the domestic coal market is declining.
Cloud Peak has said that the location of the coal deposit, next to Cloud Peak’s Spring Creek mine, along with its Younger Creek project and CX Ranch lands would allow it to optimize its mine development.
Put in perspective, Americans burn about 1 billion tons of coal a year.
“So this is one and a half years of American’s total coal,” Marshall said.
Once under way, the mine “could potentially go on for as long as there’s a demand for coal,” he said.
Thursday was a day for ceremony, with members of the Crow executive and legislative branches seated on a stage in the auditorium in headdresses. Cloud Peak presented gifts to tribal leaders and hosted a luncheon afterward for 500 people.
Representatives of Sen. Max Baucus and Rep. Steve Daines spoke briefly. Other elected leaders from surrounding communities also were on hand.
The signing ceremony started and ended with Crow prayer, and both Marshall and Old Coyote came to the podium to address the crowd.
Marshall said he hoped Thursday’s agreement would be the start of a long-term partnership that will bring prosperity to the Crow Tribe, as well as Cloud Peak.
Marshall said Cloud Peak and the Crow Tribe can work together toward the development of a West Coast coal port.
“Then this mine will go ahead and bring the prosperity we’re both looking for, particularly in terms of the jobs that it would take to mine the coal,” he said.
Old Coyote said a mine would provide a new source of revenue as the tribe deals with poverty and double-digit unemployment.
The tribe already benefits from royalties from the Sarpy Creek coal mine.
“I’ve asked we work together as a tribe to push this project forward so we can all benefit from the natural resources that we have as the Crow people,” Old Coyote said.
In addition to tribal revenue, the agreement could lead to jobs for tribal members. Cloud Peak is providing $75,000 annually in scholarship funds to Crow college students, and Old Coyote said vocational training would be provided to members who hope to work in the mining trade.
After the ceremony, he said the Crow Tribe is in the process of fact-finding with members of the Affiliated Tribes of Northwest Indians over development of West Coast coal ports. After the fact-finding, the tribe will decide about the issue.
“We’re not going to go in and say ‘you have to do this,’ ” Old Coyote said.