Peabody's Australian subsidiary, Peabody Pacific, now operates four coal mines in NSW and six in Queensland, with a vision for further organic growth, particularly in NSW.

In a presentation to the NSW Mineral & Exploration Investment 2007 Conference last week, Peabody general manager of strategic planning and projects Dr Julie Beeby said a major attraction of Excel Coal was the mining assets it held in each of the major coal mining regions in NSW.

Under the Excel takeover, Peabody acquired the Wambo, Wilpinjong, Metropolitan and Chain Valley mines in NSW, and the Millennium mine in Queensland.

Before acquiring Excel's coal assets, Peabody produced about 9 million tonnes per annum in Australia, but is now expected to produce up to 21Mt in 2007 and more than 23Mt in 2008.

The opencut Wambo coal mine, located in the Hunter Valley region, is currently undergoing an expansion which will ramp up surface mining and see the introduction of a new 3Mtpa longwall operation, North Wambo, later this year.

In the Western coal region near Mudgee, the opencut Wilpinjong mine extracts coal from the Ulan Seam which has been mined for around 30 years at the nearby Ulan Colliery by both opencut and underground methods.

The Metropolitan longwall mine is nestled in the Illawarra region of the state and mines approximately 1.5Mt each year, while the smaller Chain Valley mine is located in the Newcastle coal field on the southern shore of Lake Macquarie.

"Peabody has a vision for further organic expansion in the NSW coal sector, but infrastructure and availability of skilled employees remain a challenge," Beeby said.

"The matching of rail and port capacity has been a challenge in recent years - and the large ship queues at Newcastle Port for loading are testament to the desire of coal suppliers and customers for the coal from this region despite demurrage costs that in prior years would have been unthinkable."

As part of the Newcastle Coal Infrastructure Group, Peabody is working towards construction of a new coal terminal to allow expansion of member mines.

"Peabody believes that we have entered a long period of sustained growth and that our outlook in Australia is bright," Beeby said.