The Montana Department of Environmental Quality (DEQ) and Navajo Transitional Energy Co. (NTEC) reached a short-term agreement that will allow coal production at the Spring Creek mine to resume. The interim agreement will keep the mine operating for 75 days while the two parties continue negotiating a long-term agreement.

NTEC acquired the Spring Creek mine in Montana and the Cordero Rojo and Antelope mines in Wyoming from Cloud Peak Energy (CPE) during its Chapter 11 bankruptcy proceedings. The transaction makes NTEC the third-largest U.S. coal producer.

NTEC is a single-member limited-liability company, organized under the laws of the Navajo Nation, which owns the Navajo mine, near Fruitland, New Mexico. NTEC operates the Navajo mine pursuant to a limited waiver of sovereign.

An impasse with Montana DEQ over sovereign immunity forced NTEC to briefly idle operations at Spring Creek. The Montana DEQ wanted NTEC to partially waive its sovereign immunity so the agency could enforce the state’s laws with regard to the mine. The interim agreement does not settle that issue, as the short-term agreement allows NTEC to operate Spring Creek mine as a contractor under its existing operating agreement, but it will let the two sides continue negotiations without closing the mine.