Peabody Energy's Business Segments

We are the largest private-sector coal company in the world. Our coal products fuel approximately 10% of all U.S. electricity generation and 3% of worldwide electricity generation. We own, through our subsidiaries, majority interests in 34 coal operations located throughout all major U.S. coal producing regions and in Australia. Additionally, we own minority interests in two mines through joint venture arrangements. Most of our production in the western United States is low-sulfur coal from the Powder River Basin. In the West, we own and operate mines in Arizona, Colorado, New Mexico and Wyoming. In the East, we own and operate mines in Illinois, Indiana, Kentucky and West Virginia. We own 5 mines in Queensland, Australia. One of the Australian mines was acquired in 2002, two were acquired during April 2004, a fourth was opened after the 2004 acquisition, and a fifth began mining operations in early 2006. Most of our Australian production is low-sulfur, metallurgical coal.

Peabody Energy Corp. is a prominent global coal company with a wide array of mining operations and a diverse portfolio of products and services. Their operations span various regions, primarily located in the United States, Australia, and Venezuela. Below is a comprehensive breakdown of Peabodys business segments, mining operations, and the types of coal products they offer.

Mining Operations

1. Powder River Basin Operations
The Powder River Basin (PRB) in Wyoming is a pivotal area for Peabodys coal production. The principle mines include:

- North Antelope Rochelle Mine: Located near Gillette, Wyoming, this mine is recognized for producing low-sulfur, premium-quality subbituminous coal. With a loading capability of up to 2,000 railcars daily, it stands as one of the largest coal mines in the United States. The coals sulfur content averages 0.2% with a heat value ranging from 8,500 to 8,900 Btu per pound.

- Caballo Mine: Situated 20 miles south of Gillette, Caballo is a truck-and-shovel operation featuring extensive coal handling systems. The mines coal characteristics align closely with those produced at the North Antelope Rochelle Mine.

- Rawhide Mine: Located 10 miles north of Gillette, this mine also employs truck-and-shovel techniques to extract coal.

2. Southwest Operations
Peabodys Southwest operations encompass mines in Arizona and New Mexico, largely supplying bituminous compliance coal under long-term agreements:

- Black Mesa Mine: Though the supply agreement for the coal transportation pipeline has expired, this mine historically transported coal to the Mohave Generating Station through an intricate pipeline system.

- Kayenta Mine: This mine supplies coal directly to the Navajo Generating Station and employs dragline mining methods to extract coal, which is transported via a conveyor belt to the power plant.

- Lee Ranch Mine: Located near Grants, New Mexico, Lee Ranch is notable for its medium sulfur coal and has long-term supply agreements in place for its output.

3. Colorado Operations
Peabody operates two mines in Colorado, managing around 0.2 billion tons of coal reserves:

- Twentymile Mine: An underground mine that employs both longwall and continuous mining techniques. It serves as a significant producer of high-quality coal with low washing requirements.

- Seneca Mine: Previously operational, it has ceased mining due to exhausted reserves and is in the reclamation phase.

4. Appalachia/Highland Operations
This segment includes a cluster of business units within West Virginia and Kentucky, controlling approximately 0.6 billion tons of coal reserves. Key operations involve:

- Big Mountain Business Unit: Centralized around the Big Mountain No. 16 underground mine, this unit processes coal through contract production from nearby reserves.

- Harris Business Unit: Primarily sourcing from the Harris No. 1 Mine, it has transitioned to accessing additional metallurgical coal reserves.

- Rocklick Business Unit: Focused on processing metallurgical and steam coal, it plays a pivotal role in regional coal supply.

- Kanawha Eagle Coal Joint Venture: A 49% owned joint venture operating multiple mining and processing facilities with a focus on underground mining.

5. Midwest Operations
Peabody’s Midwest Operations consist of 14 wholly-owned mines located in the Illinois Basin:

- Bluegrass Mine Services: Includes a mix of surface and underground mines in Kentucky.

- Black Beauty Coal Company: Operates several mines in Indiana and Illinois, utilizing non-union workforces with a focus on steam coal production.

- Arclar Company: Operates surface and underground mining complexes in southern Illinois, producing medium sulfur coal primarily for utility markets.

6. Australian Mining Operations
Peabody manages five coal mines in Queensland, Australia, with operations focused on metallurgical and thermal coal:

- Wilkie Creek Mine: A surface operation utilizing truck-and-shovel methods.

- Burton Mine: Emphasizing metallurgical coal, it operates from surface reserves and has control over significant production volumes.

- North Goonyella Mine: Noted for its longwall underground operation, producing specialized metallurgical coal.

- Eaglefield Mine: A surface operation fulfilling contract requirements alongside the North Goonyella.

- Baralaba Mine: A relatively new contractor-operated surface mine focused on pulverized coal injection product and steam coal.

Venezuelan Mining Operations
Peabody holds a 25.5% interest in the Carbones del Guasare joint venture, which operates the Paso Diablo Mine, producing 6-8 million tons of steam coal annually for export.

Products and Services
Peabody Energys main products include:

- Thermal Coal: Primarily used for electricity generation.
- Metallurgical Coal: Used in steel production and often requires special handling and transportation.
- Pulverized Coal Injection (PCI) Coal: A substitute for metallurgical coal commonly used by steel mills.

Summary
Peabody Energy Corp. is a leading supplier in the global coal market, with diverse mining operations across several key regions. Its extensive infrastructure and focus on producing both thermal and metallurgical coal underpins its role in energy production, critical to modern economies. The company continues to adapt to market demands and regulatory changes, offering reliable coal supplies while adhering to industry standards and environmental practices.