Peabody Energy coal mining operations in the Black Mesa plateau of the Four Corners region in the western United States began in the 1960s and continue today. The plateau overlaps the reservations of the Navajo and Hopi Tribes.
Controversy arose from an unusually generous mineral lease agreement negotiated under questionable circumstances between the Tribes and Peabody Energy, the coal company's use and degradation of a potable source of water to transport coal via a pipeline from the mine to a power plant hundreds of miles away, and the public health and environmental impacts of strip mining on tribal lands.
In 1964, Peabody Energy (then Peabody Western Coal), a publicly traded energy company based in the Midwestern United States, signed a contract with the Navajo Tribe and two years later with the Hopi Tribe, allowing the company mineral rights and use of an aquifer. The contract was negotiated by prominent natural resources attorney John Sterling Boyden, who claimed to be representing the Hopi Tribe while actually on the payroll of Peabody. It offered unusually advantageous terms for Peabody and was approved despite widespread opposition. The contract is also controversial because of misrepresentations made to the Hopi and Navajo tribes.
Peabody Energy developed two coal strip mines on the Black Mesa reservation: the Black Mesa Mine and the Kayenta Mine.
Peabody Energy pumps water from the underground Navajo Aquifer for washing coal, and, until 2005, in a slurry pipeline operation to transport extracted coal to the Mohave Generating Station in Laughlin, Nevada. With the pipeline operating, Peabody pumped, on average, 3 million gallons of water from the Navajo Aquifer every day. The aquifer is the main source of potable groundwater for the Navajo and Hopi tribes, who use the water for farming and livestock maintenance as well as drinking and other domestic uses. The tribes have alleged that the pumping of water by Peabody Energy has caused a severe decline in potable water and the number of springs. Both tribes, situated in an arid semi-desert, attach religious significance to water, considering it sacred, and have cultural, religious, and practical objections to over-use of water.