Profile: Peabody Energy Corp (BTU.N)
17 May 2013
Peabody Energy Corporation (Peabody), incorporated on February 27, 1998, is a private-sector coal company. The Company owns interests in 28 active coal mining operations located in the United States and Australia. The Company has a majority interest in 27 of those coal operations and a 50% equity interests in the Middlemount Mine in Australia. The Company also owns a noncontrolling interest in a mining operation in Venezuela. In addition to the Company's mining operations, the Company markets and broker coals from its operations and other coal producers, both as principal and agent, and trade coal and freight-related contracts through trading and business offices in China, Australia, the United Kingdom, Germany, Singapore, Indonesia, India and the United States. The Company conducts business through four principal segments: Western United States. Mining, Midwestern U.S. Mining, Australian Mining and Trading and Brokerage. The Company's fifth segment, Corporate and Other, includes mining and export/transportation joint ventures, activities associated with certain energy-related commercial matters, Btu Conversion. The Company's coal supply agreements are primarily with electricity generators, industrial facilities and steel manufacturers.
U.S. Mining Operations
The principal business of the Company's Western and Midwestern U.S. Mining segments is the mining, preparation and sales of thermal coal, which is typically supplied to United States. electricity generators and industrial customers for power generation, with a portion sold into seaborne export markets. The Company's Western U.S. Mining segment consists of the Company's Powder River Basin, Southwest and Colorado mining operations. The Company's Midwestern United States Mining segment includes the Company's active mining operations in Illinois and Indiana.
Australian Mining Operations
The Company's Australian Mining segment operations consist of the Company's mines in Queensland and New South Wales, Australia. The mines in that segment are characterized by both surface and underground extraction processes for the mining of various qualities of metallurgical and thermal coal. Metallurgical coal qualities produced by that segment include hard coking coal, semi-hard coking coal, semi-soft coal and pulverized coal injection (PCI) coal. PCI coal is generally used by steel producers as a partial replacement for coke made from coking coal. The Company's Australian Mining segment operations are primarily export focused with customers spread across several countries, while a portion of the Company's coal is sold to Australian steel producers and power generators.
Trading and Brokerage Segment
The Company's Trading and Brokerage segment engages in the direct and brokered trading of coal and freight-related contracts through trading and business offices in Australia, China, Germany, India, Indonesia, Singapore, the United Kingdom and the United States. Coal brokering is conducted both as principal and agent in support of various coal production-related activities that may involve coal produced from the Company's mines, coal sourcing arrangements with third-party mining companies or offtake agreements with other coal producers. The Company's Trading and Brokerage segment also provides transportation-related services in support of the Company's coal trading strategy, as well as hedging activities in support of sales from its mining operations.
Corporate and Other Segment
The Company's Corporate and Other Segment includes selling and administrative items, activity associated with the Company's joint ventures, resource management activity, past mining obligations and its other commercial activities such as generation development and Btu Conversion development costs. As of December 31, 2012, the Company held approximately 9.3 billion tons of proven and probable coals reserves and approximately 500,000 acres of surface property. In addition, the Company generates revenue through royalties from coal reserves and oil and gases rights leased to third parties and farm income from surface lands under third-party contracts.
The Company owns a 50% equity interest in the Middlemount Mine in Queensland, Australia. The mine predominantly produces semi-hard coking coal and PCI coal, with a small portion of thermal coal, for sale into seaborne coal markets through rail and port capacity contracted. The Company owns a 48.37% noncontrolling interest in Carbones del Guasare S.A., which operates the Paso Diablo Mine, a surface operation in northwestern Venezuela that produces thermal coal for export primarily to the United States and Europe. The Company owns a 50% interest in Peabody-Winsway Resources B.V., a joint venture agreement with Winsway Coking Coal Holding Ltd. (Winsway), a Hong Kong stock exchange listed company in which the Company also own an equity interest. The joint venture holds several exploration licenses and continues to evaluate potential metallurgical and thermal coal projects for possible development. The Company has a 37.5% interest in a coal export terminal in Newport News, Virginia that exports both metallurgical and thermal coal primarily to European and Brazilian markets.
The Company competes directly with Alpha Natural Resources, Inc., Arch Coal, Inc., Cloud Peak Energy Inc. and CONSOL Energy Inc., Anglo-American PLC, BHP Billiton, China Coal, Rio Tinto, Shenhua Group and Xstrata PLC.
Peabody Energy Corp
Peabody Plaza, 701 Market St
ST. LOUIS MO 63101-1826