SHERIDAN — Montana Department of Environmental Quality officials are optimistic they will reach an agreement with the Navajo Transitional Energy Company that would reopen the Spring Creek Mine sometime Friday, a spokeswoman from the department told The Press.

“At the end of the day yesterday, we believed that we were making really good progress between NTEC and (Montana) DEQ, so we’re really optimistic we can come to an agreement today,” said Rebecca Harbage, the Montana DEQ’s public policy director.

NTEC, a limited liability company wholly owned by the Navajo Nation, finalized its purchase of Spring Creek Mine — along with the Cordero Rojo Mine and Antelope Mine in Wyoming — from Cloud Peak Energy Thursday after Cloud Peak was forced to sell its assets in bankruptcy proceedings.

The two Wyoming mines NTEC acquired continued operations Thursday, but the Montana DEQ denied the company an operating permit for Spring Creek, prompting the company to announce the “immediate and indefinite shutdown” of Spring Creek Mine Thursday morning.

Spring Creek employs 300 workers and between 95% and 100% of the employees who work at Spring Creek Mine live in Sheridan County, according to the Sheridan County Chamber of Commerce. Jodi Hartley, the Chamber’s director of marketing and communications, said the organization does not have an exact count; 98% of the mine’s employees hailed from Sheridan County as of two years ago.

The dispute with Montana DEQ centers on NTEC’s “sovereign immunity,” representatives from both the agency and the company said.

Federal laws exempt sovereign Native American tribes — like the Navajo Nation — from state laws. Harbage said DEQ officials were concerned that the company’s sovereign immunity would interfere with the agency’s abilities to enforce Montana’s laws.

In NTEC’s Thursday morning press release, the company claims the Montana DEQ refuses to issue the company an operating permit unless it agrees to a “full and complete waiver” of its sovereign immunity.

Harbage disputes that claim.

“(Montana) DEQ never demanded a full and complete waiver (of NTEC’s sovereign immunity) as it says in their press release,” Harbage said. “We have been in conversation and are still in conversation today with NTEC over what exactly the partial or limited waiver looks like.

“We have even offer an interim waiver to get this through and not suspend mining at the Spring Creek mine,” she continued.

Harbage said she could not comment on which specific Montana DEQ regulations NTEC does not want to waive their immunity from, as they are still subject to ongoing negotiations.

Rep. Cyrus Western, R-Big Horn, said he with Montana DEQ Director Shaun McGrath Thursday morning and McGrath told him that the DEQ would be meeting with NTEC Thursday afternoon.

But considering the number of jobs at stake, Western stressed that time was of the essence.

“As of Monday, the workers get furloughed — their paycheck stops,” Western said. “…This is a situation that it looks like there’s a way out of, but it needs to be resolved immediately. The potential consequences are very serious.”

Erny Zah, NTEC’s director of communications and media affairs, confirmed talks were still ongoing Friday morning.

“We’re actively in negotiations with the state of Montana’s DEQ and we are hopeful that we can resolve our issues soon,” Zah said.

Harbage said the Montana DEQ informed NTEC of the waiver issue at the beginning of October, but the company did not come to the negotiating table until Monday.

The issue of the company’s sovereign immunity has also been an issue within the Navajo Nation, which owns but does not control NTEC.

According to a release on the Navajo Nation Council’s fall session, which concluded Oct. 23, the council tabled a piece of legislation that would terminate a general indemnity agreement between the council and NTEC.

That legislation explains that the Navajo Nation Council approved the creation of NTEC in 2013 for the purpose of purchasing the Navajo Mine, in New Mexico.

For that purchase to go through, NTEC had to acquire performance and reclamation bonds, which are financial sureties intended to guarantee a company will have funds to restore mining lands if and when a mine closes.

The indemnity agreement the recent legislation sought to terminate allowed a partial waiver of NTEC’s sovereign immunity in an effort to acquire the necessary bonds for the Navajo Mine.

The bill claims that certain sureties could seek to use that earlier agreement to get the Navajo Nation to financially back bonds for the former Cloud Peak Mines NTEC acquired Thursday.

“Under applicable laws, NTEC must obtain surety bonds or other financial assurances related to the reclamation of the Cloud Peak Mines and other obligations in order for NTEC to own/operate those mines,” the legislation reads.

“These bonds could total between $350 million and $400 million.

“The Navajo Nation has understands (sic) that NTEC wants the Navajo Nation’s financial backing on surety bonds for the Cloud Peak Mines,” the bill continues.

The bill in question would require NTEC to seek new approval for financial backing from the Navajo Nation on bonds for the Cloud Peak Mines.

Zah said he does not expect those issues will hold up the deal with the Montana DEQ.

“We are confident that we will have everything we will need to maintain operations that meet all legal requirements,” Zah said.