Business | Environment

Energy company with ties to Arizona tribes declares bankruptcy

Thursday, April 14, 2016

A view of the Kayenta Mine in Arizona. Peabody Energy operates the mine through leases with the Hopi Tribe and the Navajo Nation. Photo from Peabody Energy

Peabody Energy, the largest coal company in the world, declared bankruptcy on Wednesday but partners don't believe a mine on tribal land in Arizona will be disrupted.

Peabody operates the Kayenta Mine through lease agreements with the Hopi Tribe and the Navajo Nation. Both tribes depend on royalties from the operation, which also puts tribal members to work.

The mine supplies coal to the Navajo Generating Station, a power plant located on the Navajo Nation. A spokesperson for Salt River Project, which runs the facility independent of Peabody, told The Arizona Republic that the bankruptcy filing won't disrupt the arrangement, so tribal jobs and revenues presumably shouldn't be affected.

The spokesperson also said the arrangement allows Salt River Project and its partners to take over the Kayenta Mine in case something arises on Peabody's end. “We don’t believe that is going to be necessary,” Scott Harelson told the paper.

Peabody developed the Kayenta Mine and the now-defunct Black Mesa Mine in the 1970s. Although the operation has served an important role in the local economy, Hopi and Navajo leaders, along with activists from both tribes, have engaged in legal and public relations battles for decades.

Criticism has centered on the environmental impacts of the mines, employment practices and the leases themselves. Through a series of lawsuits, the Navajo Nation accused Peabody of engaging in a conspiracy with the federal government to deny the tribe its fair share of royalties from the coal.

The tribe eventually settled with Peabody in 2011 for an immediate $50 million payment and other investments on the reservation. A separate dispute was settled by the Obama administration for $554 million although the amount might have been higher had the U.S. Supreme Court not ruled against the tribe's breach of trust lawsuit in 2003 and again in 2009.

Get the Story:
No disruptions expected at Navajo coal plant despite Peabody bankruptcy (The Arizona Republic 4/14)
Peabody, largest US coal miner, seeks bankruptcy protection (AP 4/13)
Coal Giant Peabody Energy Declares Bankruptcy (NPR 4/13)
How coal titan Peabody, the world’s largest, fell into bankruptcy (The Washington Post 4/13)

An Opinion:
Chuck DeVore: First, The EPA Came For The Navajo; Next, They’re Coming For Everyone (The Federalist 3/29)