An Interior Development official told Associated Press Mohave Generating Station, which uses the Black Mesa’s low sulfur coal, had failed to reach an agreement with tribal leaders that would allow test drilling of a new aquifer.

The tribes have demanded Peabody stop using the current aquifer by 2006 amidst fear the pumping is damaging springs that have ceremonial significance. The 2006 halt will come at the same time the Mohave station and the mine coal contract is due to be renewed.

Several other essential agreements and pollution upgrades to allow the mine and power station remaining open are dependent on a new water source being developed.

Peabody's Black Mesa and Kayenta mines operate through lease agreements with the Navajo Nation and the Hopi Tribe and last year shipped 12 million tons of low sulfur compliance coal to the Mohave Generating Station near Laughlin, Nevada, and the Navajo Generating Station near Page, Arizona. Under complex geologic conditions, coal is mined from multiple seams and splits of seams ranging in thickness from three to 18 feet.

Peabody said weekly the Black Mesa operation injects more than US$2 million into Navajo and Hopi communities in direct economic benefits.

Mining operations annually generate more than $50 million in royalties, taxes and other payments. Last year, the mines injected nearly $200 million into area communities through lease related payments in addition to employee salaries and benefits as well as vendor contracts.