Members of the International Union of Operating Engineers Local 953 agreed to the deal with 282 yes votes and 102 no votes. The agreement covers about 450 surface miners at Navajo and San Juan mines west of Farmington.
The contract takes effect immediately, and is retroactive to Feb. 1, when the last agreement expired.
"Approval of this agreement is a positive step for the viability of (BHP Billiton New Mexico Coal's) surface operations, including Navajo Mine, the continued delivery of coal to our customers, as well as the continued employment and safety of our employees and contractors," Pat Risner, president of BHP Billiton New Mexico Coal, said in a joint statement with the union Wednesday night. "We commend the union leadership and company representatives for their diligence and steadfastness in reaching an agreement."
BHP Billiton in December announced it had reached a preliminary agreement to sell Navajo Mine to the Navajo Nation. Under the memorandum of understanding, BHP would continue operating the mine for the tribe until July 2016.
Navajo Nation officials had expressed optimism a deal could be reached between the union and coal company. The agreement erases one uncertainty from the tribe's possible purchase of the mine. Navajo officials continue to evaluate the mine purchase.
"With the ratification of this new five-year agreement by our membership, the union is confident that this agreement supports the Navajo Mine into the future, not only for our members and the company but for the community as well," said Pat Vigil, business manager of the union local.
"I am proud of the unity displayed by the membership during the negotiations. Both sides worked extremely hard to achieve what we believe was a fair and balanced outcome given the circumstances we are both under," Vigil said.
Officials declined to discuss details of the contract. In January, the union members overwhelmingly rejected an earlier contract offer.
The mine is the sole supplier of Four Corners Power Plant, and faces a 30 percent cut in demand for its coal later this year due to a plan to close three of the plant's five stacks.
Risner told San Juan County commissioners in early January the company would cut about 100 jobs at the mine before the mine's transfer to the tribe. He said BHP would try to avoid layoffs, instead offering buyouts to many of the mine's employees who are past retirement age.