Coal Supercycle

Peabody expects Coal Supercycle – Capacity in Australia to Double

21.06.2010 | Editor: Marcel Dröttboom

...that could double its metallurgical and thermal export coal platform by 2014, targeting 35 to 40 million tonnes of production, assuming a favorable investment climate in Australia. In the Asia-Pacific region, Peabody is developing a pipeline of projects and partnerships to expand its presence:

• In China, the world‘s largest coal consuming nation, Peabody is advancing a number of growth projects from those in the nascent stage to active construction, including joint ventures with potential partners including utilities, steel companies and coal companies.
• In India, the world‘s fastest-growing coal importer, Peabody was recently selected by Coal India as one of a few companies to serve as a key partner for long-term supplies and other strategic ventures.
• In Indonesia, the world‘s largest thermal coal exporting nation, Peabody is exploring partnerships with local suppliers, who are increasingly seeking new avenues to move coal to market.
• In Mongolia, Peabody‘s joint venture is driving exploration of dozens of resource licenses to develop coal properties, while continuing efforts to be a part of the development of the Tavan Tolgoi reserves.

Peabody President and Chief Commercial Officer Rick Navarre introduced a multi-pronged approach to build an Asian platform with a long-term goal of reaching 100 million tons per year. Peabody is targeting: increased exports from its Australian operations; expanded coal trading; participation in coal conversion and clean coal projects; active production through joint ventures; and development of a Mongolian export base. “We expect global seaborne markets could be some 100 million tons short of coal by 2015 as emerging economies, led by China and India, achieve growth rates that are two to three times that of developed nations,” said Navarre.

Operations Started at Bear Run Mines in Indiana, USA

In the United States, Peabody announced that it has now begun operations at the new Bear Run Mine in Indiana. Bear Run is targeting 8 million tonnes of annual production by 2012, and the company notes that the mine’s potential capacity could reach 12 million tonnes per year with additional investment. The company also noted that its new El Segundo Mine in New Mexico is the most productive mine outside of the Powder River Basin. And in the Western United States, Peabody’s flagship mine – North Antelope Rochelle – is on track to ship 100 million tons or more in 2010. The company reaffirmed its financial targets for 2010, including EBITDA of USD 1.6 billion to USD 1.9 billion and adjusted earnings per share of USD2.45 to USD3.15. Boyce added that 2010 results could rival Peabody’s record year of 2008.