Peabody still backing development

PEABODY Energy continued on its expansion path last year by bringing several projects to production status, according to chairman Gregory Boyce.

Donna Schmidt

At Peabody’s recent annual meeting, Boyce said the company had had a record performance in 2008 thanks to a tight rein on capital expenditures and costs.

Its heavily contracted position was part of its strategy to weather the global financial crisis and “position the company for an inevitable rebound”

In addition to having the safest year in its 125-year history, the producer marked a record sales volume of 256 million tons. Another record was the $US6.6 billion in revenue, $1.4 billion in operating profit and $985 million in income from continuing operations.

Peabody said it had retained its focus on growth in the US and abroad, highlighted by the recent go-ahead for the Bear Run mine in Indiana. Now under development, the complex will be the largest surface operation in the eastern United States and serve long-term contracts that could realise almost $6 billion in revenue.

Also in the US, Peabody has completed its projects to improve productivity and production at the North Antelope Rochelle mine in Wyoming, as well as the build-out of its El Segundo mine in New Mexico.

The company has continued work in the Asia Pacific, completing a multi-year build-out of its Australian platform. It also recently sealed its Mongolian joint venture with Polo.

With coal use expected to grow 61% by 2030 along with 25% population growth, Peabody said energy needs were anticipated to rise 45%. It said clean coal technologies needed to be a part of that mix.

"I believe that black is the new green," Boyce said.

"Green coal technologies build on coal's environmental progress, providing a path to near-zero emissions through efficient new coal plants and ultimately carbon capture and storage. We believe that coal with CCS is the low-cost, low-carbon solution."

The company already has standing involvements across the globe for low-carbon projects. In addition to being a founding member of Australia’s COAL21 Fund, Peabody was one of the initial founding members of the FutureGen Alliance in the United States and is the only non-China partner included in China’s GreenGen effort.

A new director line-up

Peabody has recently elected five directors to its board.

M Frances Keeth is the newest member. Keeth was a former executive vice-president of Royal Dutch Shell and a former chief executive officer and president of Shell Chemicals Limited.

Among those members re-elected to the board are Peabody chairman Gregory Boyce, RockPort Capital Partners founding member William James, former Arthur Andersen managing partner Robert Karn III, and former Barclays Capital managing director Henry Lentz.

The board also recognised the retirement of board member Dr Blanche Touhill, University of Missouri – St Louis chancellor emeritus and professor emeritus.