Asset president Pat Risner confirmed that tonnage at the mine-mouth operation near Farmington would be reduced by an estimated 30% due to the closures of three of five units at the Four Corners power plant.
However, he added that the closure – and timeframe for it – was largely tied to a decision by plant operator, the Arizona Public Service, and a pending deal with Southern California Edison.
Risner said it was the progression of a plan that had been in place for nearly two years.
“Everyone has known this was coming for some time,” he said.
That includes the complex’s 500 workers, about 100 of which will see their jobs eliminated when the mine production reduction comes sometime between April and June.
However, Risner noted, BHP was working to achieve that reduction without any kind of forced lay-off activity.
He said about 165 of its workers were currently eligible for retirement and those individuals would be offered early retirement packages.
Regardless of when the generation units at the power plant are taken offline and the staff reduction is completed, BHP says the APS will continue operations as they exist now, at least until later this year.
BHP is also continuing to eye mid-year 2013 for a transfer of ownership of the coal mine to the Navajo Nation.
Risner pointed out that the moves being made at the generation facility and the Navajo mine buyout were related only in the manner that they were occurring at the same time.
The potential sale to the tribe could preserve as many as 800 mine and plant jobs, so Risner said he saw the possibility of new ownership providing a “bright future” for the entire complex.
“Our overriding concern and our overriding reason for taking this action is to preserve jobs and the operations at Four Corners power plant and Navajo mine beyond 2016,” he told San Juan County commissioners last week.
“The alternative was you lose the jobs and you lose the revenue in 2016. That was an unacceptable outcome for BHP Billiton."
The Navajo mine’s only supply sale customer is the 2100-megawatt Four Corners plant and the facility gets its fuel only from that surface operation.
No financial details related to the potential ownership transfer of Navajo mine have been released.
However, Risner told the San Juan County commissioners that the deal was to be structured as a stock sale of 100% of assets to a Navajo Nation tribally chartered corporation.
