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The Navajo Nation is considering taking over the Kayenta Mine in addition to the coal plant near Page that is scheduled to close this year, speaker LoRenzo Bates said Monday.

The revelation shows an increased willingness by the tribe to take risks to keep the coal facilities running. Any deal to acquire the mine and the largest coal plant in the West will involve not only the price, but also the clean-up liability.

Nonetheless, Bates said the tribe must consider all options because the facilities are so critical to the tribal economy.

Bates also said that the Navajo Nation has years worth of coal in the ground, which someday could be used for other purposes such as making liquid fuels. Shutting down the operations could foreclose any opportunities to sell the coal for those uses.

The tribe announced in November it was considering taking over the troubled Navajo Generating Station, and Bates said the tribe for months has also been exploring taking over the mine from Peabody Energy.

"There is information going back and forth as we speak," Bates said, adding that having the facilities vertically integrated under one entity would be more cost effective.

MORE: Out of options, the Navajo Nation seeks to take over troubled NGS coal plant

The tribe in 2013 formed an entity called the Navajo Transitional Energy Co., or NTEC, to buy a mine in New Mexico that supplies a coal plant outside Farmintgon, and later used that energy company to acquire a small stake in that power plant, the Four Corners Power Plant.

Now, faced with an economic catastrophe if the Navajo Generating Station power plant near Page and the Kayenta Mine 78 miles away from the plant close, Bates said the tribe could use NTEC to keep the plant and mine running.

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Salt River Project and the other utilities that own the Navajo Generating Station voted in 2017 to close the three, 750-megawatt generators at the end of 2019 because it is cheaper to buy power from natural gas plants.

But the tribe and the U.S. Bureau of Reclamation, which owns a portion of the power plant, have sought to keep it running. In September, the only seriously interested buyer walked away from negotiations and closure looked certain.

Bates said that thanks to its tax status, the tribal entity could produce coal for cheaper than Peabody can, and if Peabody can't sort out a way to lower production costs, it may be best for NTEC to step in and run the mine.

"We have a path forward economically," Bates said. "The question is can we make it work with all the other pieces and politics."

Navajo council, SRP play a role in takeover

The new Navajo Nation council being sworn in this month following last fall's election will have to decide whether such a move is prudent, he said.

The Navajo Generating Station is on Navajo land while the mine is on both Navajo and Hopi land. The facilities employ about 750 people when running at full capacity, nearly all of them Native Americans.

The leases, jobs and other economic benefits of the facilities play a vital role in the budgets of both tribes.

Any deal to keep the plant and mine open will have to come quickly, as SRP is deferring any needed repairs at the plant and sending workers to other openings at the water and power utility across the state.

The current lease calls for operations to stop in December, and gives SRP time to clean up the site after that. If the tribe wants to keep the plant open, it will be easier the sooner that can be decided.

"We are down to the wire," said Anthony Peterman, an energy adviser for the Navajo Nation.

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