NEW YORK, March 31 (Reuters) - Greg Boyce, who heads U.S. coal miner Peabody Energy Corp (BTU.N), may have signaled his move two months before Wednesday’s $3 billion bid for Australia’s Macarthur Coal MCC.AX.
That’s when he told Wall Street analysts Peabody was going all-out to boost exports from its Australian mines by 20 percent to 30 percent this year and expanding business development in Australia to tap increasing demand from Asian steelmakers for metallurgical, or coking coal.
Macarthur rebuffed Peabody’s offer of A$13 per share on Wednesday, but analysts believed it was just an opening salvo and the St Louis-based company would likely increase its bid.
Boyce, chairman, president and chief executive of Peabody and a 30-year veteran of the global mining industry, was not talking on Wednesday. But he could not have been clearer in January when Peabody posted higher-than-expected fourth-quarter profits, thanks in part to booming Australian sales.
“Not every company earns the right to grow,” Boyce said then, noting that Peabody had the required skilled management team, asset base, safe low-cost operations, expanding margins, the right contract strategies and a strong balance sheet.
“We need to deliver that growth. That’s why we’re expanding our Australian operations to take our export capacity up to as much as 15 million tons of metallurgical coal, and 17 million tons of thermal exports by 2014,” he told the analysts.
The world’s largest private-sector coal company, Peabody’s revenues last year were $6 billion and sales volumes totaled 243.6 million tons — 22.3 million of those from Australia. Its coal fuels about 10 percent of all U.S. power generation.
Laying the groundwork for expanded operations in Australia — the world’s largest coal exporter — Boyce’s Peabody had acquired Excel Coal Ltd in 2006 for about $1.3 billion.
In January, Boyce signaled the latest move saying the company was advancing access to transportation infrastructure in Australia, including new contracts with rail providers and construction of a terminal in the port of Newcastle.
“We continue to pursue high value acquisitions and joint ventures,” he said.
Boyce joined Peabody in 2003 from international coal giant Rio Tinto (RIO.L) in London, where he oversaw coal and uranium operations in five countries. He has transformed Peabody into an American company with a global perspective. It is the only U.S. coal company with mines overseas as well as in the U.S. Midwest and the Powder River Basin of Montana and Wyoming.
In addition to masterminding acquisition efforts in Australia, Boyce made the company a major supplier to Asia and opened trading offices in London, Beijing and Singapore and a business development office in Jakarta.
Boyce grew up on Long Island, New York, the son of a mining executive and he trained as a mining engineer. The New York Times called him coal’s “strongest evangelist” for his unabashed advocacy of the fossil fuel. He argues that a way to reduce carbon dioxide emissions can be found without having to switch from the existing cheaper coal-burning technology.
In the face of environmentalist attacks, he says coal is the key to America’s energy future and that improvements in technology to limit carbon emissions should be left to the market instead of government regulation.
Indeed, Peabody under Boyce has been a major opponent of regulations to cap greenhouse gas emissions. It spearheaded opposition to a bill to curb global-warming gases that died in Congress in 2008.
Peabody cultivated close contacts with the Bush administration and Boyce was chairman of an advisory panel for the Energy Department, organized by the National Coal Council, that produced a controversial report in 2006 calling for exemptions to the Clean Air Act to encourage greater consumption of coal through 2025.
Although the future of coal-fired power plants is still up in the air, Boyce has no doubts.
“It’s a good time to be Peabody,” he said in an interview with USA Today in 2008. “There’s not enough natural gas. There’s not enough renewables (wind, solar energy) to go around. So I’m not concerned that coal is going to disappear. For us not to use that resource, we are just shooting ourselves in the foot.”
Reporting by Steve James; Editing by Bernard Orr