Closing on the transactions is expected within the next three months and requires no additional U.S. or Australian regulatory approvals.

 

The combined purchase price is US$441 million in cash, and no debt will be assumed. The combined 2003 EBITDA of the purchased properties is approximately US$95 million, excluding gains from foreign currency translation. The transactions are expected to be accretive to earnings in the first 12 months.

 

The purchases include two Queensland mines that produce 7 million tonnes per year of high-quality metallurgical coal used by steel producers in Pacific Rim countries. Peabody said steel markets in Asia are showing double-digit growth given strong economies and infrastructure needs.

 

The Twentymile Mine in Colorado, which produces 7.5 million tons per year of low sulfur steam coal for electricity generators in the West, Southwest, Midwest and Mexico. Twentymile is perennially one of the largest and most productive underground mines in America.

 

"The new operations will help Peabody to further diversify its customer base and will increase its presence in international markets," said CEO Irl Engelhardt.

 

"We are acquiring high-quality assets, which allows us to accelerate our rate of growth. We look forward to welcoming the talented RAG employees and management to the Peabody team."

 

The companies continue with a memorandum of understanding for Peabody's purchase of a 25% interest in Carbones del Guasare, S.A., a joint venture that includes Anglo American and a Venezuelan governmental partner. Carbones del Guasare operates the Paso Diablo surface mine in northwestern Venezuela, which produces nearly 7 million tonnes per year of coal for electricity generators and steel producers in Europe and North America.