Peabody CEO Glenn Kellow told an investor's conference call that the company would also be combatting pricing pressures, rising overburden ratios and reduced scale.
"There's no question that downdraft in industry can lead to pressures, but also opportunities and we continue to evaluate those opportunities with an eye to improve asset quality, generate cash flows, unlock synergies and create shareholder value," he said.
"We also believe these actions will be enhanced by steps to streamline the organisation and strengthen the portfolio.
"In Australia, the United Wambo JV with Glencore has received a major permit approval, and we've also decided to proceed with the Moorvale South extension."
The Moorvale South extension project in Queensland extends the mine life to 2029.
"We also expect increased coal quality," Kellow said.
"We will transition from a greater mix of PCI [pulverised coal injection] to an enhanced coking coal profile as early as next year.
"The project also provides optionality for future extensions and allows continued blending with Coppabella coal. Moorvale South will utilise equipment transferred from our Millennium Mine, which leads to low capital equivalents of about $30 million for the project."
Kellow said the company had identified annualised cost improvements totalling US$50 million and further analysis was underway to capture additional savings over time.