MacDonald joins call to derail Black Mesa plan
By Bill Donovan, Special to the Navajo
Times, NOVEMBER 26, 2008
WINDOW ROCK - The time has come for
Peabody Coal Co. to leave Navajo land and let other
companies mine and market the coal reserves it has controlled
for close to 50 years, a former tribal leader said Tuesday.
"The best thing that the Navajo
Nation could do is to get rid of Peabody," said
former Chairman Peter MacDonald Sr.
He made the comment when asked for his
opinion on an environmental impact statement concerning
Peabody's plans for Black Mesa, where it has over 65,000
acres under lease.
The U.S. Office of Surface Mining is
in the process of finalizing the study, and is proposing
to endorse the plan that Peabody wants.
Last week Hopi Tribal Chairman Ben Nuvamsa
said the plan OSM is poised to approve would shut out
the Hopis from decisions governing their share of Black
Mesa coal reserves for years to come.
President Joe Shirley Jr.'s office referred
a request for comment on the Black Mesa plan to the
tribe's minerals department, where officials said there
is nothing that can be done about Peabody's leases.
The proposal under consideration would
allow Peabody to combine the unmined acreage of its
Black Mesa Mine, closed since December 2005, with its
active lease, the Kayenta Mine. That would allow Peabody
to maintain control of millions of dollars worth of
Navajo coal despite having no plan to mine it, no way
to get the coal off the mesa, and no customer to buy
The Kayenta Mine lease is good until
2026, but Peabody has been seeking to convert the lease
term to an undefined "life of mine" - meaning
until all the recoverable coal is removed - and to add
the Black Mesa acreage to it.
The Black Mesa Mine has been idle since
the Mohave Generating Station, its sole customer, closed
with no plans to reopen. Peabody had banked heavily
on Mohave eventually prevailing over concerns about
its pollution, and had no alternative buyer for the
Black Mesa Mine output when Mohave's owners finally
called it quits.
The Kayenta Mine supplies the Navajo
Generating Station near Page, and provides 100 percent
of the coal needed there.
Mineral leases on federal lands, on
which the Black Mesa leases are modeled, can be extended
indefinitely but in order to do so, the company must
demonstrate continued development and production is
taking place. Otherwise, the leases lapse, as Peabody
itself noted in a 2003 filing with the federal Securities
& Exchange Commission.
Peabody's position is that the Black
Mesa Mine is still an active lease.
John Stucker, an engineer for the tribe's
Minerals Department, said that while Peabody has no
immediate plans to reopen the Black Mesa Mine, it has
not given up the hope of finding a buyer and is still
trying to find one.
But MacDonald contends that it is not
in the best interest of the Navajo Nation to approve
anything that would further Peabody's interests on the
Referring to Peabody as the "BIA
of mining companies," MacDonald said Peabody has
taken advantage of the tribe time and time again and
was able to get away with it because the original lease
agreement, signed in the 1960s, was negotiated by the
The lease came under heavy criticism
during the early years of the MacDonald administration
for the low royalty rates accepted by the BIA, which
MacDonald famously compared to the price of a can of
Coke for each ton of Navajo coal that Peabody removed.
MacDonald and his general counsel at
that time, George Vlassis, were able to get a better
rate - 12.5 percent of the sales price - under a lease
provision that allowed royalties to be renegotiated
every 10 years.
But years later the tribe learned that
even then Peabody took unfair advantage, exerting influence
with then Interior Secretary Donald Hodel to suppress
information that supported an even higher royalty rate.
The tribe eventually sued the U.S. Interior
Department and the company, claiming that Peabody owes
an extra $600 million in lost royalties and the feds
betrayed their trust obligation to represent the tribe's
Those cases have been up and down in
the federal court system for years. This fall the U.S.
Supreme Court said it will review a recent appellate
court ruling that the tribe's claim against Interior
should be heard, which had revived the Navajos' hopes
for reclaiming lost royalties.
OSM plans to issue its record of decision
by Dec. 8, but MacDonald contends that the Navajo Nation
should take the position that the lands leased by Peabody
should be returned to the tribe so the tribe would have
the option of developing the coal reserves itself or
assigning them to another coal operator.
"There are several companies that
would be interested in those lands," MacDonald
Allowing the Black Mesa acreage to be
folded into the other mine's permit is not a good idea,
he said, and only allows Peabody to continue victimizing
He pointed to this as a case for the
need to change and to stop expecting that doing the
same things the same way will produce different results.
"Getting rid of Peabody will be
a change for the better for the Navajo people,"