The Department of Interior will pay a Utah mining company $14 million for 17 coal leases inside the Grand Staircase-Escalante National Monument, the agency said Friday.
Andalex Resources Inc. had estimated it could generate $59.5 million in profits mining the coal in the leases during the next 40 years. The company estimated the value of the high-grade coal at $3 billion. The estimates were supported by the Utah State Geologist.But a 1997 study by the Bureau of Land Management concluded the Kaiparowits coal is less valuable than coal mined in central Utah.
Andalex president Doug Smith said Friday the two sides could not come to an agreement on the value. The amount of the settlement was based on the amount Andalex Resources had spent on the project, he said.
Smith would not say if the company was satisfied with the agreement or bitter about the monument creation.
President Clinton created the monument by presidential proclamation in September 1996. At the time, Clinton vowed to honor all existing mineral leases within the monument's borders. But restrictions on development inside the monument made mining impractical, Smith said earlier.
In exchange for the cash payment, Andalex will relinquish its interests in 34,499 acres of coal claims, mostly grouped in the southeast portion of the monument near the Kaiparowits area. The region includes the Kaiparowits plateau, one of the most remarkable geographic features in the monument.
"That's good news," said monument manager Jerry Meredith when he learned of the settlement. "It removes a potential for a huge controversy if they decided they wanted to go ahead (and mine) because it would be a big fight between those who didn't want it mined within the national monument and those who were concerned about the president's proclamation."
"This completes three promises made through President Clinton's designation," said Interior Secretary Bruce Babbitt in a prepared statement Friday.
Babbitt said the first promise was kept when the department swapped school trust land trapped in the monument for mineral claims and land outside the borders. The proceeds from development of the land are earmarked for Utah's schools.
"We resolved concerns about the proposed Andalex coal mine in the monument today, and we protected this spectacular work of creation for all time," Babbitt said.
Under terms of the agreement, Andalex will share $2.1 million of the settlement with three utility companies that collaborated on the project.
The agreement still must be approved by Congress. The deal has the support of Sen. Bob Bennett, R-Utah.
"I'm pleased that through this settlement agreement Andalex will be made whole," he said in a statement. "I look forward to working with Secretary Babbitt to help him find funds within the Interior Department budget to make good on this agreement."