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Hopi Tribe opposes lease extension on water thirsty Black Mesa Mine

PHOENIX ? An ongoing dispute between the Hopi Tribe and St. Louis-based Peabody Energy Corp. threatens that company's plans to expand its mining operations on the Hopi Reservation in Arizona. "The chairman is not going to agree to any additional mining or agree to any additional leases until we resolve the water issue," said Hopi spokeswoman Claire Heywood.

Peabody purchases water from both the Hopi and Navajo Reservations to transport coal to its Mohave Generation Station in Laughlin, Nev. The coal is slurried 273 miles through an underground pipeline that moves the equivalent of the capacity of 50,000 railcars annually. The Hopis want the company to seek another water source, as the tribe says Peabody's actions threaten its water supply, the 7,500-square-mile Navajo Aquifer.

On behalf of the tribe and the Black Mesa Trust, Santa Fe, N. M.-based environmental group Wild Angels recently filed a shareholder resolution with Lehman Brothers Inc., Peabody's largest shareholder, to force the company to reduce or eliminate its use of Navajo Aquifer water. Citing the most recent study by the U.S. Geological Survey, the group claims Peabody takes 4,400 acre-feet of water per year for its slurrying operations, while Hopi and Navajo use hovers around 3,000 acre-feet annually. The aquifer is replenished at an annual rate of approximately 2,500 to 3,500 acre-feet, said Michael Stewartt of the environmental group.

On Feb. 4, Peabody announced receipt of a notice of completeness from the Department of the Interior's Office of Surface Mining regarding its updated permanent program permit application for the Black Mesa Mine. The permit application marks the start of Peabody's development process for a new reserve within its Arizona lease area. The company, which has operated the mine since 1970, hopes to extend its current lease beyond 2005; approval of the application would extend the lease for up to 15 years.

"Continued operation of the Black Mesa Mine is in the public interest and will provide long-term economic benefits to the Hopi Tribe and the Navajo Nation," said John Wasik, group executive for Peabody's southwestern operations. "It also provides an essential and secure energy supply for more than 1 million Southwest families who rely on the electricity."

In a Jan. 30 news release, Peabody said the mine will "inject about $1.5 billion in direct economic benefits into reservation communities in royalties, taxes, wages and vendor contracts over the proposed extension." The Black Mesa Mine has almost 250 employees; Native Americans comprise 96 percent of the mine's work force and 82 percent of its supervisory staff, Peabody said.

An impact analysis cited by Peabody says plans to increase pumping from the Navajo Aquifer will not effect the Hopis' water supply. "Using this additional water for the life of the mine would continue to equate to withdrawing less than one-tenth of one percent of the 400 million acre feet of water stored in the aquifer," the company said in its news release. "Eleven major public and private water studies performed over the past 30 years support this conclusion."

According to the news release, Peabody's updated application calls for a 12 year-plan to develop the J-23 coal reserve in the northeastern section of the Hopi Reservation. In the application, the company calls for increased coal production of up to 1.5 million tons annually. It presents hydrologic impact assessments on the use of up to 5,700 acre-feet of water from the aquifer for slurrying purposes. The increases in both coal production and water use would begin in 2006, and would supply the Mohave station with fuel enough to operate its planned environmental control systems.

"We respect cultural concerns about using the aquifer and remain fully committed to seeking out an alternative," said Fred Palmer, Peabody's executive vice president for legal and external affairs. "While these discussions are under way, extensive study and monitoring of the aquifer will continue. The nature of the regulatory review process requires Peabody to file a routine environmental and engineering analysis years in advance of the actual mining."