Coal sales under the first five years of the agreement are expected to be in excess of $US1 billion.

“Peabody has a long tradition as a reliable supplier and offers the strength of vast resources and flexibility of sourcing through multiple mines, thanks to our unmatched 10 billion ton reserve portfolio," Peabody executive vice-president and chief marketing officer Richard Whiting said.

Peabody currently has a customer backlog of more than 1 billion tons through long-term coal supply contracts.

TVA is the nation's largest public power provider, supplying power to large industries and 158 power distributors that serve approximately 8.7 million consumers in seven Southeastern states.