Cloud Peak Energy Signs Exploration Agreement With Crow Tribes
According to news released by Business Wire, Cloud Peak Energy, a U.S.-based coal producer has made an agreement with the Crow Tribe of Indians for the exploration of 1.4 billion tons of “in-place” coal reserves supposedly located in the Northern Powder River Basin (NPRB). As per the standard operating procedure of making such accords, the contract requires an approval by the U.S. Dept of Interior. Cloud Peak has already made a transaction of $2.25 million to the Crow Tribes with an additional $1.5 million pending after the approval of Interior Dept. 5 annual payments totaling $10 million will also be paid by Cloud Peak during the first five years.
This agreement gives Cloud Peak the right to explore three coal deposits in NPRB in the first five years, with a provision to extend the contract further, depending on the conditions met. The deposits of NPRB are in the same area as Spring Creek mine and Young Creek project, and it is expected that Cloud Peak will develop these new mines in cohesion with other mines as a big project. Once approved by the Dept. of Interior, Cloud Peak Energy shall begin with the exploration.
If it exercises the option to lease deposits, it will pay Tribe $.08-$0.015, per ton ? as per the defined lease terms, incorporating inflation effects into the agreement. The agreement will even adjust royalty rates ranging from 7.5% to 15%, along with coal production taxes of 20% to be paid to the Tribe. Cloud Peak, in line with the contract will prefer to hire and train qualified Indians to work on these reserves. It will also fund a Crow scholarship amounting $75,000 and $150,000 annually, if the lease agreement is approved. The company shall also be liable to support Indian certified contractors.
Colin Marshal, the President and CEO of Cloud Peak energy says; “Cloud Peak Energy is pleased to have signed the agreements with the Crow Tribe and is hopeful that the Department of Interior approval will follow in good order. The exploration and other work to get to a decision on exercising an option(s) and, ultimately to production, is a multi-year process. Ideally, the development of the Crow Tribe coal resources and our larger The Spring Creek complex would coincide with the development of new West Coast export terminal capacity. We also see the potential to expand NPRB domestic customers with high Btu, lower sodium content coal from certain Crow Tribe coal deposits. We’re embarking on what we see as a long-term partnership with the Crow Tribe that will hopefully provide revenue and jobs and economic development on the reservation.”
Chairman of Crow Tribal Executive branch, Darrin old Coyote says “I am pleased to sign the Cloud Peak Energy agreements on behalf of the Crow Tribe. Our new Executive team assumed office a little more than a month ago. By prioritizing this set of agreements, and with the recent approval of the Crow Legislative Branch, we have reaffirmed our collective commitment to responsibly develop our natural resources for the long-term benefit of our Tribal citizens. We believe the Cloud Peak Energy agreements offer the best potential for near-term development of the Tribe’s large coal resources in the southeastern part of the Indian Reservation. This development would diversify our revenue sources to fund essential Tribal Government services, provide real educational and training opportunities for our youth, and generate many new good-paying jobs.”
“Montana jobs rely on working together to create new opportunities. The Crow Tribe is blessed with rich natural resources along with decades of experience in responsibly developing them. I’m proud to see this historic agreement between the Crow Tribe and Cloud Peak Energy come together for the jobs Crow tribal members and Montanans need today and in the long-run, I look forward to continuing to work with all parties to foster even more opportunities for all Montana families”, said U.S Senator from Montana, Max Baucus.
About Cloud Peak Energy
Headquartered in Wyoming, Cloud Peak Energy is one of the largest U.S coal producers and is categorized as the only pure-play coal producer in America. Living up to its expectations of being the safest coal producer in the country, Cloud Peak specializes in producing sub-bituminous coal with minimum sulfur content. It has three surface coal mines in the PRB region and is one of the low-cost coal producers. Spring Creek is located in Montana in Decker region, while Cordero Rojo and Antelope are in Wyoming. Cloud Peak also has the rights of exploring substantial underdeveloped coal deposits in NPRB, which will further strengthen the company’s position as a long-term exporter of coal to Asian markets. The company has 1,600 employees and is highly respected for its safety and environment-friendly programs. It supplies fuel for 4% of the country’s electricity needs.
About Crow Tribe of Indians
Crow Tribe is an Indian tribe recognized by the Federal Authority with 13,000 members, occupying 2.2 million acres of reserves in the Montana region. The 2001 constitution by the Tribe defines its executive, legislative and judicial branch of the Tribes Govt.