2008_Cnvyr-SpecialED

W hen it comes to best practices in safety, there are those who would say, ‘Just Do It’… and there are

those who would say… ‘Do It Better.’The latter is the case for talented teams at Peabody’s

Viking and Francisco mines in Indiana, dual honorees as Peabody President’s Award winners for best-in-company results in 2007. Both mines have earned the distinction in prior years, too.

Viking completed 2007 with zero reportable incidents, compared to the 2007 U.S. surface mine incident rate of 2.11 incidents. All told, the team celebrated more than four consecutive years and 1.3 million hours without a single reportable incident this March. Viking is located in Daviess County and last year produced 1.7 million tons of coal.

The Francisco team literally halved their incident rate every year for three consecutive years, winding up 2007 with a record 1.09 incident rate per 200,000 employee hours. That’s the best underground safety record in Peabody’s 125-year history and represents results that are 84 percent better than the U.S. peer average this past year. Francisco is located in Gibson County and last year shipped approximately

900,000 tons of coal.Results like these

explain why Peabody has delivered the three safest years in its history and is on track for another record year with a fi rst quarter U.S. incident rate of 1.50 per 200,000 hours worked, also an all-time record.

With solid safety performance comes compulsory questions: how do we keep our

practices best; how do we keep our solutions creative; and how do we consistently fi nd ways to do it better?

“We’re seeing a step change in culture where we fi rst think through safety in every situation whether we’re on site or off,” says Matt Ubelhor, Operations Manager for the Viking and Miller Creek mines.

IN THIS ISSUERawhide Makes Clean Sweep P3 Boosts Performance

4

Cooperation inTavan Tolgoi Peabody SeeksMongolian Partners

13A Company125 Years StrongPeabody’s Legacy of Growth

6

Australia Becomes Mo Man’s Land Peabody Fundraises for Charity

15

Peabody Invests in GreatPoint Partners Advance Btu Conversion

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A N e w s l e t t e r f o r P e a b o d y E n e r g y E m p l o y e e s a n d S t a k e h o l d e r s S p e c i a l E d i t i o n S p r i n g 2 0 0 8

Australia Becomes

125CELEBRATING

YEARS

Special Edition

CTPM

A Company125 Years Strong

This past year was among the three safest in Peabody’s 125-year history, and the company continues to make new records, achieving its best ever U.S. safety results in the fi rst quarter of 2008.

Case in point: When fi rst shift employees at Viking saw early morning joggers taking a run in the dark, they handed out refl ective safety vests, according to Matt. After employees realized that early morning hunters might get a little too close to active mining areas, one enterprising employee posted refl ective fl ags every 150 feet around the pit. And because hand injuries could not be tolerated, a ring policy was put in place, doing away with a potential hazard, and in the case of Viking, eliminating those accidents.

At Francisco, the mantra is much the same: “Every day’s a new day when it comes to safety,” says Joe Faulk, an underground equipment operator. He notes that Francisco has a youthful workforce, and there has been a signifi cant focus transferring a tradition of best practices to new employees. That’s especially important as the mine ramps up with a new unit, set to double its production this year.

“Attitude and awareness are also key,” says Tommy Alvey Jr., a Francisco equipment operator. “We’ve really stepped it up, we’re proud of what we do, and there is a big difference in results.”

Best practices in safety continue to earn honors for Peabody operations around the world. This past year, the Farmersburg Mine in Indiana earned Sentinels of

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BTU’S SAFETY RESULTS BETTER THAN MAJOR INDUSTRIES

U.S. Accidents Per 200,000 Worker Hours

Source: Peabody March 31, 2008 data; U.S. Department of Labor Occupational Safety and Health Administration, 2006 data;

Mine Safety and Health Administration, 2007 data.

‘Do It Better’… President’s Award Winners Drive Big ResultsSafety recognition from the U.S. Department of Labor for operating the safest large surface mine in the United States. The company’s Lee Ranch Mine in New Mexico also earned dual statewide recognition for safety, and the Governor of Wyoming and state mine inspector each recognized the North Antelope Rochelle Mine as the safest in the state. In Australia, Peabody’s operations improved their 2007 lost-time accident rate by more than half, including the contribution of new mines.

Management continues accelerating efforts to improve safety, focusing on strengthened communications, reinforcing safe behaviors and addressing the root causes of accidents. During the last year, Peabody trained mine supervisors and safety teams to analyze the factors that contribute to unsafe conditions and behaviors.

The company has structured measurement systems and incentive packages to identify and reward leaders who consistently demonstrate actions that lead to safety results. Involving more hourly employees in the safety observation process will also assure heightened focus in 2008. For example, the company is rolling out SLAM...“Stop, Look, Analyze, Manage”... a step-by-step risk assessment process to help every employee take action to prevent accidents.

“SLAM is about looking at what’s going on around you, assessing the risks and analyzing how to mitigate them before you start a job,” says Dave Beerbower, Vice President of Safety, who recalls discussing SLAM with two mechanics at an Indiana mine. “We asked them what they did to prepare for a particular job, and right away they said, ‘We SLAMmed this project.’ They considered all the safety controls, down to preventing the bolts they were cutting off from falling into the fl oor below. That level of attention to detail will continue to improve our performance.”

Such collaboration is critical to sustaining safety gains, according to John Dever, Underground Superintendent at Francisco Mine: “Around here, it’s understood that we are accountable to help ensure that everyone returns safely to our family and friends every day.”

But perhaps Steve Huff, a 12-year veteran equipment operator at Viking, says it best: “We work together to be the best we can be,” says Steve. “There’s no ‘I’ in team.”

Francisco Mine in Indiana achieved a new safety record among Peabody’s underground operations. Francisco and Viking Mine in Indiana earned Peabody President’s Awards for safety this year.

900

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Sandra Van Treaseon Wellness Taking Charge of Your Health

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Peabody’s new SLAM... “Stop, Look, Analyze, Manage”...program helps employees knock out risks by assessing and addressing them in teams.

In a broad-ranging interview with Conveyor, Chairman and Chief Executive Offi cer Greg Boyce explains his vision for driving greater use of coal at a time of extraordinary opportunity for Peabody and the global energy industry. Conveyor: Peabody

successfully completed a number of major initiatives last year, essentially transforming the company to serve global growth markets. As we celebrate our 125th anniversary, please describe The New BTU.

Greg: As we mark our 125th anniversary, it is an exceptional time to be the world’s largest coal company. The world is short of energy, and coal’s affordability, abundance and security of supply make it the only fuel that can close the gap between rising needs and scarce and expensive alternatives.

Growing, Global and Green: Meet The New BTUAmid these strong market fundamentals, Peabody is

completing a global transformation. The New BTU is a world leader in clean coal solutions. We’re sculpting a new business portfolio to serve the best global growth markets. We’ve expanded our international operating and trading platform, with a growing emphasis on robust Pacifi c Rim markets. We’re focusing on long-term operations in high-growth markets like China, Mongolia and Mozambique. We are advancing greater use of clean coal technologies for generation, coal-to-gas production and carbon storage. And we are leading global clean coal solutions with fl agship energy and environmental projects in the United States, China and Australia.

Coal’s contribution to society is even more valuable today than when Peabody was founded in 1883. Our founder and namesake, Francis Peabody, recognized that coal had the power to transform the way people lived. As the world settles into the 21st Century, Peabody continues to defi ne the future of energy, using coal to achieve energy security, economic growth and environmental solutions… what I call the 3Es.

Conveyor: Peabody operated the safest U.S. surface mine in 2007 and achieved a number of safety milestones. How can we continue to raise the bar to achieve zero incidents of any kind?

Greg: Let me start with a summary of our results:

The past three years have been the safest in our 125-year

history. Peabody’s safety rate this past quarter was 1.50,

a new company record, and we’re on track to achieve another

impressive year. Our performance continues to earn

recognition. In 2007 we were honored for safety and

emergency preparedness in every region, bringing home

nearly 20 U.S. and Australian awards.

Employees at our Farmersburg Mine in Indiana set the

pace, earning the U.S. Department of Labor’s prestigious

Sentinels of Safety Award for operating the safest large surface

mine in America. Our Viking Mine in Indiana achieved four years

without a reportable incident, and the Lee Ranch Mine in New

Mexico earned dual statewide awards for outstanding safety.

continued on page 14

Greg BoyceChairman and Chief Executive Offi cer

2|Conveyor Special Edition 2008

As group president of community hospitals for BJC Healthcare, one of the country’s premier nonprofi t

healthcare organizations, I commend Peabody Energy for its focus on employee wellness as a natural extension of the company’s safety initiatives.

Like safety, health begins with the individual. Just as every corporation has metrics to measure performance, you and I must understand the basics of our health. Fortunately, that is not diffi cult to do. The following fi ve measures give us a good overview of our health – and what we need to do to improve it:

• Blood Pressure (BP) – Goal 120/80 or below. If your blood pressure is between 120/80 and 139/89, you have prehypertension, which means you are more likely to develop hypertension in the future. If your fi rst number is 140 or higher or the lower number is 90 or higher, you already have hypertension. Research indicates that one in three adults has high blood pressure but one-third don’t know it. Uncontrolled high blood pressure can lead to stroke, heart attack, heart failure or kidney failure. So, it is critical to know your blood pressure, and take appropriate steps, as advised by your doctor, to maintain a healthy level.

• Cholesterol – Goal under 200. Total cholesterol between 200 and 239 is considered borderline. Above 240 it’s considered high. Too much cholesterol can narrow and block arteries, increasing the risk of heart attack or stroke. There are many ways to cut cholesterol. But, fi rst, know your cholesterol level.

• Fasting Blood Sugar – Goal below 100. Blood sugar levels from 100 to 126 indicate that you are prediabetic. By defi nition, a number above 126 means you have diabetes. Without treatment, diabetes can cause severe complications, including heart disease, stroke, blindness, nerve damage and kidney disease. Again, know your blood sugar level. Ask your doctor, and target a level below 100.

• Body Mass Index (BMI) – Goal 18.5 - 25. If your BMI is between 25 and 30, you may be overweight. If it’s above 30, you may be obese. BMI is a measure of weight compared to height and is correlated with body fat.

BMI ranges matter because they are based on the effect body weight has on disease and death. As BMI increases, the risk for some diseases also grows. There is a simple way to assess your BMI using the Internet. (Visit the National Institute of Health’s website nhlbisupport.com/bmi to calculate your BMI score.)

• Smoking – Goal: stop smoking. Smoking can lead to lung cancer, heart disease, emphysema, other lung diseases and a host of other health problems. Smokeless tobacco increases risk of mouth and throat cancers 30 times. There is no “safe” way to smoke or use smokeless tobacco. The only alternative for good health is to stop using tobacco.

As I mentioned earlier, there is nothing diffi cult about knowing these fi ve basic indicators. We can fi nd our “scores” for blood pressure, cholesterol and blood sugar during our annual physical exams. Armed with information, we can become more proactive – and effective – in taking responsibility for our health.

Peabody has provided tools to make managing your health even easier in its appropriately named Invest In Yourself wellness program. Invest In Yourself recognizes the fact that we all are different and have different needs. So, it is fl exible, and it is practical. Peabody’s in-house health consultant, Dr. James D. Blankenship, breaks down sometimes complex medical information into easily understood points.

Peabody Energy cares about employees’ safety and their health. It has made big investments in both areas and continues to seek ways to improve your well being.

But, as with safety, it’s critical for each one of us to take personal responsibility for our health. That responsibility begins by knowing where we stand.

As we move beyond New Year’s resolutions, I urge all Peabody people and their families to learn these fi ve basic scores. Then take charge to ensure these measures are the best they can be.

Sandra A. Van Trease is a board member of Peabody Energy and a member of the Audit Committee. As Group President of BJC HealthCare, she directs one of the largest nonprofi t healthcare organizations in the United States. A Certifi ed Public Accountant and Certifi ed Management Accountant, Sandra also serves on the board of Enterprise Financial Services Corporation.

Five Points to Know to Take Responsibility for Your Health

Sandra A. Van Trease, Group President of BJC Healthcare

Printed on recycled paper.

Peabody Energy, 701 Market Street, St. Louis, MO 63101-1826; Phone: 314-342-3400; Fax: [email protected]; Peabody Energy (NYSE: BTU) is an Equal Opportunity Employer. Visit PeabodyEnergy.com and CoalCanDoThat.com

Conveyor is written for employees and stakeholders and is produced by the Investor Relations & Corporate Communications Department.

The use of the words “Peabody,” “the company” and “our” relate to Peabody, our subsidiaries and our majority-owned affi liates.

Copyright © 2008 Peabody Energy

M E S S A G E F R O M C H A I R M A N A N D C H I E F E X E C U T I V E O F F I C E R G R E G B O Y C E

Conveyor Special Edition 2008|3Conveyor

Low-cost electricity is good for you. Just ask Frank Clemente and Roger Bezdek. The pair of

highly regarded economists and Ph.D.s have devoted years to studying the impact of electrifi cation on the economy.

Their conclusion: To fi ght poverty and protect the environment, consumers

should use more clean coal-fueled electricity.

Bezdek, President of Management Information Services

in Washington, D.C., offers a straight-forward reason: “Ecowatts.”

Coined by author and economist Mark P. Mills, the Ecowatts theory is based

on a simple, but powerful, premise: Low-cost, coal-fueled energy supports economic growth and

promotes more effi cient and sustainable technologies.In other words, producing energy with clean coal

technology transforms ordinary watts of power into environmentally benefi cial “eco” watts.

The proof, says Bezdek, is in the pounds of carbon dioxide produced by the U.S. economy. America generates less carbon dioxide per dollar of gross national product today than it did 30 years ago, according to the U.S. Energy Information Administration. The Information Revolution occurred during the same period, introducing electronic gadgets that help us work more productively – from the personal computer to the Blackberry.

“The American economy is far more energy effi cient now than it was three

decades ago,” he says. “And we have electric technologies to thank. Today we do far more work with less power.”

The savings start at home, says Bezdek. He points to millions in the

developing world who currently come home to dinner cooked

over an open fi re. Although such a meal may sound

simple, it’s only 2 percent effi cient. If the same wood was burned in an electric boiler, it could roast

10 to 15 dinners, producing far fewer air emissions and preventing deforestation.

He cites many other electric technologies that save energy. Hybrid engines are now transforming gas-guzzling cars into super-effi cient electric appliances. Telecommuting and e-commerce reduce travel and increase effi ciency. The Federal Reserve transports far fewer canceled checks from banks thanks to electronic payments. Radio identifi cation tags now track shipments from manufacturers to store shelves, resulting in far less waste. Lasers move ink in printers, etch metal and even perform surgeries. And these days far more people send documents by e-mail than post.

The trend toward electrifi cation will only accelerate in the decades ahead, says Dr. Frank Clemente, Senior Professor of Social Science and Energy Policy at Pennsylvania State University.

“The more low-cost power we use, the better we get at maximizing every watt,” he says. “This demand for, and investment in, technology is only possible when countries have access to low-cost energy, which is primarily powered by coal.”

Beyond energy savings, Clemente says, there is another major incentive for switching to electric technologies: human health.

“Why is electricity so important to the world?” he asks. “It’s about more than playing Sudoku on your computer or watching your favorite television show. For the 1.6 billion people without electricity in the world, electric power means the difference between light and darkness, warmth and cold, life-saving medicine and sickness. Electricity use is closely correlated with better quality of life… even life itself.”

The United Nations links abundant energy to improving quality of life. Higher per capita electricity use occurs in nations that score higher on the organization’s Scale of Human Develop-ment. And on average an individual’s life span increases 10 years with each tenfold increase in per capita electricity usage, according to the World Resources Institute. Developing nations typically seek the lowest cost and most abundant source of electricity to propel their populations out of poverty, which is typically coal. Coal is already the world’s fastest-growing fuel, and coal use is expected to rise more than 70 percent within the next two decades, according to the International Energy Information Agency.

For Fred Palmer, Senior Vice President of Government Relations and an industry veteran, recent fi ndings on the economic benefi ts of coal couldn’t be clearer or more convincing.

Palmer breaks down the scientifi c results into a short equation: “Electricity equals life and, around the world, coal equals electricity.”

“It’s as simple as that.”

Special Edition 2008|3

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A coal-fueled e-mail uses just a fraction of the energy of a standard “snail-mail” delivery.

With clean coal initiatives on several continents, Peabody brings experience and expertise to the GreenGen partnership, according to Xiaopeng Li, President of China Huaneng Group: “We are pleased to have Peabody Energy join GreenGen,” Li said. “Peabody’s participation represents another important step forward in voluntary global partnerships to meet long-term energy challenges, promote a cleaner environment and create technology solutions to address concerns about climate change.”

Peabody’s participation also comes as the company expands its presence in the booming Asian marketplace.

Peabody Joins China’s Ultimate Carbon Initiative

continued on page 13

Asite southeast of Beijing will soon give way to China’s most important climate initiative: a large-

scale commercial, near-zero emissions coal-fueled power plant with carbon capture and storage.

Dubbed GreenGen, the $1 billion multi-phase project is a centerpiece of China’s environmental efforts, and Peabody is the only non-Chinese equity partner. The company joins a consortium of eight major energy fi rms led by China Huaneng Group, one of the top ten power companies in the world and the largest power generator in China. Other GreenGen partners include the China Datang Corp., the China Huadian Corp., the China Guodian Corp.,the China Power Investment Corp., the Shenhua Group, the China National Coal Group and the State Development and Investment Corp.

“Peabody is the global leader in clean coal solutions, and GreenGen is among several fl agship initiatives we are advancing to commercialize clean coal technologies and address concerns about climate,” says Chairman and Chief Executive Offi cer Greg Boyce. “Through a variety of global partnerships and projects, we’re moving the world closer to near-zero emissions and carbon management with each passing day.”

Construction is expected to begin in 2008 in the northern coastal port city of Tianjin and will proceed in stages. As early as next year, GreenGen would begin delivering 250 megawatts of electricity to households and businesses using China’s most abundant energy resource. In later phases, GreenGen will generate a total of 650 megawatts of clean electricity generation with hydrogen production, carbon dioxide storage and polygeneration.

“China, like the United States, prizes coal for energy security, and both nations are pioneering clean coal models,” says Rick

Navarre, Peabody President and Chief Commercial Offi cer. “The world’s growing economies are using coal to fuel

prosperity and a better quality of life. Clean coal technology continues to drive environmental progress.”

GreenGen will be China’s fi rst integrated gasifi cation combined cycle (IGCC) facility. This technology gasifi es coal, removing impurities. In later phases, the project will capture carbon for use in enhanced oil recovery at nearby offshore fi elds. Preliminary geological studies indicate Chinese oil fi elds and aquifers have several hundred years of carbon storage potential.

Chairman and Chief Executive Offi cer Greg Boyce (seated left) and President and Chief Commercial Offi cer Rick Navarre (standing left) participate in a GreenGen signing ceremony at the prestigious State Guest House in Beijing, China. They are fl anked by U.S. and Chinese dignitaries, including U.S. Secretary of the Treasury Henry Paulson, Jr. and China’s Vice Premier Wu Yi.

P 3 : A C H I E V I N G P E A B O D Y P E A K P E R F O R M A N C E

Rawhide Makes ‘Clean Sweep’ for Continuous ImprovementPeabody Peak Performance – P3 – is our path to

becoming the best energy company in the world. To deliver best-in-class results, Peabody has launched more than a dozen transformation, best practice and growth initiatives under the P3 banner.

T he shop at Rawhide Mine is spotless. The fl oors and cabinets are spic and span, the work area is tidy, and

parts and tools in an adjoining staging area are organized to make the most of the maintenance schedule.

All this effort is part of a master plan. Employees at the Wyoming mine followed “Six S” principles (Sift… Sort… Shine… Safety… Straighten… Sustain), a step-by-step process that improved the time mechanics search for parts and tools by 6 percent and increased machine availability.

Rawhide’s clean sweep is just one of many processes introduced by the mine’s Operations Center of Excellence (COE), a 17-week project team uniting seasoned mine employees with subject-matter experts from across and outside the company. Part of the company’s fl agship P3 program, the COE has launched 17 ongoing continuous improvement projects at Rawhide that have reaped productivity gains and cost-effi ciencies estimated at more than $2 million this past year.

“Peabody has always had continuous improvement initiatives but never anything quite like the COE, and our results at Rawhide speak loudly,” says Terry Pettigrew, Rawhide Operations COE Continuous Improvement Coordinator. “Our fi rst focus is on learning the processes to help us improve our business. Meanwhile, we at Rawhide had a two-fold job: To safely get as many tons down the rail as possible to meet our customer commitments and to shift our focus to cost control and convert gained effi ciencies to cost savings. Best practices from all the COE efforts at the various mines are helping us meet these challenges.”

Still, best practices are successful because of the people who implement them, according to Terry: “Every COE project team was led by a Rawhide employee and included a technician. These people know how things work and they have shared that knowledge.”

“Rawhide is the kind of place where people will stick around after the shift ends just to share what happened with the next group. People really look out for each other, and that culture also makes a difference.”

Clear communication counts, too, as COE and Mindsets, Behaviors and Capabilities team members Sherry Coleman and Angela Fisk learned when the pair met with crews to present ideas on shift change and new communications methods.

Sherry recalls an extremely high engagement level: “People were saying, ‘Hey, that’s great. Now what about this,’” she laughs. “The buy-in was fabulous.”

Sherry and Angela also administered training and introduced a performance management system to help leaders clearly communicate expectations and hold employees responsible for results. Six Performance Boards encourage a culture of accountability and speed the fl ow of information. At a glance, a passer-by can fi nd everything on the boards from safety performance and production measures to shift schedules and action plans.

Communication is also critical to the COE safety team, which invested in electronic signage to broadcast safety messages and introduced a series of best practices, including a safety observation process and a color-coded safety index.

“Our Rawhide COE gave us the time and resources to evaluate the safety process. With the help of the COE Safety Team we developed systems that will make us a safer

mine,” says Jeff McClaren, Rawhide Safety Analyst and leader of the Safety Team.

Other areas received equally close attention. For example, the preparation plant team installed a computer that speeds the process of getting train car identifi cation numbers synchronized with the load-out system. In the past, train load-out operators synchronized scale only after backing away the entire coal train. Today, a new system can synchronize the scale after only two train cars reverse course. A process that once consumed more than two hours can be complete in as little as 15 minutes, and Rawhide’s shipping movements improved 65 percent in 2007. Notably, the solution was pioneered at the Caballo Mine, which hosted the COE pilot.

The overburden casting process also benefi ted once the COE got to work. A project team launched on site operator training, rethought cast patterns, reallocated equipment and used electronic detonators. As a result, the operation maintained effectiveness while minimizing disturbance.

Says Terry: “As with many projects, the casting and rail load-out crews at Rawhide already knew much of what needed to be done. They just needed the extra resources to push projects past the fi nish line.”

At the Rawhide Mine in Wyoming, teams from Peabody Peak Performance (P3) and the Operations Center of Excellence launched 17 ongoing continuous improvement projects that resulted in signifi cant productivity improvement and cost savings in the second half of 2007.


Productivity Gains and Cost-Effi ciencies in the Second Half of 2007

$2.4 Million

A new computer system enables the Rawhide Mine to swiftly recalibrate its scale, reducing shipping delays from 2 hours to as little as 15 minutes.

Caballo Mine Celebrates Its 500 Millionth Ton of Production

Peabody Boosts Export Capacity with Coal Terminal Investment

Peabody Fuels the College Dreams of Navajo and Hopi Students

Around the world and back again… That’s how far 500 million tons of coal would stretch end-to-end,

carried by 4 million railcars. Peabody’s Caballo Mine in the Powder River Basin reached this remarkable production milestone in April 2008.

A Union Pacifi c train carried the mine’s 500 millionth ton by rail to American Electric Power Company’s Cook Coal Terminal in Illinois for eventual shipment by barge to Indiana-Michigan Power Company’s Rockport Generating Station in Rockport, Ind.

Peabody is the largest coal producer in Wyoming’s Powder River Basin, with 2007 sales of nearly 140 million tons. During the life of the Caballo Mine, roughly 29,000 Union Pacifi c and Burlington Northern Santa Fe trains have been loaded with Caballo’s coal.

Opened in 1978, the Caballo Mine began shipping low sulfur coal to American Electric Power the following year. The Rockport Station receives approximately 2.5 million tons of Caballo’s coal annually, joining nearly a dozen coal-based utilities that use the mine’s product to deliver affordable

Peabody is increasing its equity ownership in the DTA coal terminal to 37.5 percent, boosting the

company’s export capacity at one of the nation’s busiest coal ports. The terminal, located at Newport News, Va., has an annual capacity of 20 million tons of coal.

Peabody’s investment increases the company’s throughput capacity by approximately 6 to 7 million tons per year. It’s among several projects Peabody is pursuing to boost throughput at a time when global demand for seaborne coal is surging. Net U.S. coal exports are expected to more than triple between 2006 and 2008, and the company expects to double its U.S. exports in 2008.

“Peabody is one of the world’s largest coal traders, and we continue to increase exports to leverage a strong global pull for our products,” says Stephen Miller, President, COALTRADE. “Peabody has committed to

energy to millions of households and businesses throughout the United States.

Last year, Caballo’s 460 employees shipped 31 million tons. “Caballo’s 500 millionth ton is a signifi cant

accomplishment at a time when energy demand is reaching record highs,” says Kemal Williamson, Group Vice President for Western Operations. “My hat’s off to employees who all worked so hard to make this happen safely and effi ciently.”

To boost export capacity, Peabody has increased its stake in DTA, one of the busiest coal ports in the United States.

Every Caballo employee received a hardhat decal to commemorate the date the mine shipped its 500 millionth ton: April 21, 2008.

Caballo employees celebrate the mine’s 500 millionth ton of production, posing before the Union Pacifi c train that carried coalto American Electric Power Company’s Cook Coal Terminal. Employees are pictured from left: Shirley Aldridge, Pam Binns,

Tonya Young, Brenda Johnson, Lee McClure, Kathy Egli, Leroy Dike, Audry Rappleyea, Scott Durgin, Donnie Fullenwider, Jeff Kucera, Dennis Dutcher, Dennis Campbell, Harold Jenkins, Lindy Engle, Roberta DeMott, Quentin Strand,

Richard Harborth, Tim Toth, Barb Chiles, Dave Allison, Sue Kuhrt, Bob Grant, Ben Ortiz, Jim Locke and Larry Reynolds.

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more export coal shipments in the fi rst three months of 2008 than it did in the past two years combined.”

DTA combines effi cient, high-speed coal handling with sophisticated sampling and blending systems. The terminal expects to handle as much as 15 million tons of export coal in 2008, or roughly double last year’s throughput.

The investment in DTA follows Peabody’s recent moves to expand export capacity globally. As a participant in the Newcastle Coal Infrastructure Group, the company is adding signifi cant dedicated throughput in New South Wales, Australia, through a major port infrastructure project.

Conveyor Special Edition 2008|5

Peabody’s Kayenta Mine is operated through lease agreements with the Navajo and the Hopi, producing more than 8 million tons of low sulfur coal annually for shipment to the Navajo Generating Station near Page, Ariz. Mining on Arizona’s Black Mesa has injected more than $2.8 billion in direct economic benefi ts into Navajo and Hopi communities through coal royalties, business payments, taxes, wages, benefi ts and charitable contributions since the operations began nearly 40 years ago.

As any cash-starved student will tell you, earning a scholarship is like winning the lottery. And for

20 years, Peabody has been making dreams come true for the hard-working students of the Navajo and Hopi tribes near the company’s Kayenta Mine in Arizona. This spring, the company presented $356,000 in scholarship funds to tribal students pursuing college and careers, adding to the nearly $7 million the company has contributed to date for Navajo and Hopi education.

“Helping young people pursue higher education has been a longstanding commitment for Peabody,” says Rob Hammond, Peabody’s Group Executive for Southwest Operations. “Our scholarship program in the Southwest has enabled hundreds of bright students to study at some of the nation’s most prestigous universities.”

Peabody has a proud tradition of funding scholarships for hard-working Navajo and Hopi students.

PEABODY CELEBR

Peabody has been going strong

since its founding in 1883.

What started as a small Chicago-

based retail coal brokerage is

now entering its 38th year of

global industry leadership.

Peabody is the world’s largest

private-sector coal company

and the international leader in

clean coal technologies. Join

Conveyor as we explore our

past and look forward to the

future in the following full-color,

fold-out poster.


Have a memory to share or a memento from Peabody’s early days?

Please contact: Meg Gallagher Corporate Communications

[email protected]


ATES 125 YEARS Peab

Peab

carried by 4the Powder milestone in

A Union ton by rail toCoal TerminIndiana-MicStation in Ro

PeabodyPowder Rivetons. DuringUnion Pacifi been loaded

Opened sulfur coal tfollowing yereceives app2.5 million tannually, joidozen coal-bthat use the product to daffordable

eabodDTA c

company’s coal ports. has an annu

Peabodythroughput per year. It’sto boost thrseaborne coto more thacompany ex

“Peabodand we constrong globPresident, C

Every Caballoemployee reca hardhat deccommemoratthe mine shipmillionth ton:

s any scho

20 years, Pethe hard-wonear the comthe companytribal studennearly $7 mNavajo and

We salute Team Peabody for breaking new ground: BTU is the fi rst coal company to rank number one in FORTUNE®

Magazine’s list of “America’s Most Admired Companies” for the industry. Our rock solid performance made us

number one in every category: Financial Soundness, Innovation, Long-term Investment, People Management,

Product and Services Quality, Social Responsibility and Use of Corporate Assets. The honor goes to the more than

7,000 employees whose hard work and dedication made this achievement possible.

Thanks BTU... and Rock On.

Peabody Energy Corporation 701 Market Street St. Louis, MO 63101PeabodyEnergy.com


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1188888888888884444444 11995555511111111999922224444 19883311992288

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F rancis Stuyvesant Peabody at age 24 was already ahead of his

time. In 1883, the fresh-faced Yale-graduate was a messenger carrier at the Chicago Merchant’s Loan and Trust Bank when he noticed what would become a national trend: coal was replacing wood in city stoves. And the Windy City wasn’t alone: by 1885, coal surpassed wood as the most popular energy source in America.

With just $100 in his pocket, Francis decided to leave banking behind, create Peabody, Daniels & Company with a partner and travel Chicago’s cobbled streets in a two-mule wagon packed with high-quality coal.

Francis chose his moment well. Chicago in the late 19th Century was the beating heart of American commerce – a boom-town teeming with industry. And coal was fueling the city’s growth. As demand grew, so did business. Within a few years, he bought out his partner and formed his own fi rm: Peabody Coal Company.

Francis sells coal from two-mule wagon to heat Chicago homes and businesses.

Francis S. Peabody founds the

company in 1883.

As the 1920s roared, Francis’ son,

Stuyvesant “Jack” Peabody, succeeded his father at the helm of Peabody Coal Company. He promptly listed the company on the Chicago Stock Exchange in 1929. The move raised capital and further fueled Peabody’s growth.

Under Stuyvesant “Jack”

Peabody’s leadership,

Peabody Coal Company

goes public.

At the turn of the century, when American industries

were consolidating, coal remained stubbornly fragmented. In 1905, nearly 3,500 mining businesses were operating in the Illinois Basin, or roughly two companies for every three mines. Francis realized that Peabody Coal Company would need to acquire mines to remain competitive and purchased mineral rights to some 40,000 acres of coal-bearing land around Taylorville, Ill. Peabody Coal Company soon grew to span seven states, with mines as far west as Wyoming.

Peabody expands rapidly, buying

a series of Illinois mines.

Peabody’s Great Heart, Black Arrow and Deluxe Magestic scatter tags built ardent

brand loyalty during the depths of the Great Depression as coal companies ramped up coal production to help win World War II. These colorful foil or cardboard disks emblazoned with

coal logos were scattered in stoker coal, railcar and truck shipments to identify Peabody’s fi nest products. As the company’s 1949 Annual Report explains: “These sturdy little messengers…generate confi dence between us and our dealers…and in turn, between them and their customers who use Peabody stoker coals.” One of Peabody’s most popular tags was for “Great Heart” coal, a high-Btu blend

that won over adventurer Admiral Richard Byrd, who purchased 200 tons to fuel his famed 15,000-mile expedition to the South Pole in 1939.

&&

Peabody’s Great Heart coal powers Admiral Byrd’s famous 1939 Antarctic expedition.

ar and truckshipments tocompany’s little messeand our decustomersOne of Pefor “Grea

that won over adventpurchased 200 tons texpedition to the Sou

cssc

ac

F rom its earliest days, Peabody Coal Company actively encouraged mine safety training,

forming the fi rst mine rescue team in Southern Illinois at its DuQuoin Mine. Peabody has continued this proud legacy into the 21st Century. The company’s mine rescue teams consistently achieve the industry’s highest honors, often undergoing far more rigorous training than peer teams. In 2007, employees were recognized nearly 20 times for safety and emergency prepared-ness achievements.

Peabody DuQuoin Mine employees form the fi rst mine rescue team in Southern Illinois and go on toset many records for service.

As World War I engulfed Europe, President Woodrow Wilson turned

to Peabody Coal Company to help the nation avert an energy crisis. The President appointed Francis to chair the National Defense’s Coal Production Committee, a group of industry leaders charged with stabilizing soaring coal prices, which had

tripled to an unheard of $3 per ton from 1915 to 1917. The committee’s efforts to ramp up production and improve railcar handling enabled the nation to power an army abroad and the American economy at home.

Hundreds of miles away, a 29-year-old coal salesman named Grant Stauffer was a rising star at Sinclair Coal, a small wholesaler in Aurora, Mo. By 1917, Grant purchased the company and just a few years later, entered a partnership with a former miner named Russell Kelce. By mid-century, Sinclair Coal was the third-largest producer in the United States and poised to play a pivotal role in Peabody’s future.

American soldiers promote Liberty Loans to fund World War I by parading through the streets of Chicago in 1918.

tonaDas

Numerous coal boards such as the Chicago

Coal Board in 1917 power the American

army during World War II. Francis S.

Peabody was selected to lead a national

coal supply effort.

I n August 1894, novelist Stephen Crane described mining in McClure’s Magazine as a “mystic

calling.” These days, the profession of coal mining is more modern than mystic. Today’s miners use state-of-the-art modular mining technology and global positioning satellites rather than carts and picks, but one constant remains: the black wall of buried sunshine that pays the bills.

A group of turn-of-the-century coal miners take a moment to

pose for the camera.

B y mid-century, Peabody was a major force in the mining industry. The nation’s eighth-largest coal producer, Peabody operated a host of

underground mines west of the Mississippi River and, in 1949, began listing its stock on the New York Stock Exchange. Still, sales were slowing as low-cost, high-volume surface-mined coal had made major inroads in the market. An opportunity came in 1955 through a merger with Sinclair Coal Company, a mining conglomerate with more than 1,200 retail and industrial operations and offi ces across six Midwestern states. Peabody brought a famous name and access to capital for investment and expansion. Sinclair brought highly competitive Midwestern surface mines. Former miner Russell Kelce assumed the presidency, energizing the new company with an ambitious expansion and modernization program that continued for 15 years.

After merging with Sinclair Coal Company in 1955, Peabody gains highly competitive surface operations like the mine pictured above.

T he modern environmental movement may have begun on the fi rst Earth Day in 1970, but Peabody had long been greening America

one tree at a time through Operation Green Earth. This innovative reclamation program embraced a simple, but crucial premise that remains core to the company’s mission today: by restoring trees and vegetation and reintroducing fi sh and wildlife, Peabody can build a sustainable cycle of life on mined lands. Peabody’s 1954 annual report emphasizes its early vision for environmental excellence, affi rming in one passage that “coal mining and land conservation go hand in hand,” and Operation Green Earth is “consistent with the company’s desire to maintain a proper standard of community citizenship in every area in which it produces coal.”

During the fi rst decade of the initiative, Peabody reclaimed nearly 50,000 acres and planted some 25 million trees and 400,000 pounds of grasses and legumes. Today the company’s reclamation program continues to lead the industry, annually planting more than a half million trees and reclaiming thousands of acres.

M ore than two centuries ago, a band of shipwreck survivors discovered

Australia’s fi rst recorded coal deposit at the mouth of the Hunter Valley of New South Wales. By the 1960s, it was evident that the continent was full of rich coalfi elds.

Australia’s vast mineral wealth beckoned to Peabody’s growth-oriented management, and in 1962, the company constructed Australia’s fi rst major export coal mine in the Kianga-Moura region of Queensland. To develop the Moura Mine, Peabody forged innovative equity

partnerships with Japanese trading company Mitsui & Co., Ltd. and Australian construction giant Thiess Holdings. Moura produced up to 3.5 million tons of metallurgical and steam coal per year.

Peabody returned repeatedly to the Australian market in the decades to follow, launching its Peabody Australia Division in 2002 following the acquisition of the Wilkie Creek Mine in Queensland’s Surat Basin. Today the company’s Australian presence has grown to include 11 operations

in Queensland and New South Wales as well as offi ces in Brisbane and Newcastle. With an expanding presence in the world’s largest exporting nation, Peabody is the fastest-growing coal company in Australia.

U nder Gregory H. Boyce’s leadership, Peabody continues to shatter performance records. The

coal industry veteran joined the company as President and Chief Operating Offi cer in 2003, became President and Chief Executive Offi cer in January 2006 and was elected Chairman of the board of directors in October 2007. During Greg’s fi rst fi ve years, income from Peabody’s continuing operations soared 248 percent; revenues rose 104 percent; and in 2007, the company achieved a new industry record for sales volume, shipping 240 million tons of coal. The company also marked the three safest years in its history and earned more than 70 honors for safety, sustainability and

stewardship. Greg also brought a powerful global perspective, having managed Rio Tinto PLC’s energy portfolio from London. He dramatically expanded Peabody’s international operating and trading platform and transformed the company into the global leader in clean coal solutions, with fl agship energy and environmental projects in the United States, China and Australia.

C rack open the World Book Encyclopedia, circa 1950, and a fascinating diagram greets the eye. Before America sent a man to the moon, World Book editors were dreaming big

about more earthly elements: the more than 200,000 ways to use coal. Even more than half a century ago, coal fi lled up semis and was transformed into natural gas for wintertime warmth. In 1948, the coke, natural gas and chemical industries used more than 108 million tons of coal, or 20 percent of that year’s national production.

Fast forward 58 years, and global energy demand is reaching new heights. Coal’s affordability, abundance and security of supply make it the only fuel capable of closing the gap between rising needs and scarce and expensive alternatives. And as the global leader in clean coal solutions, Peabody is advancing generation and Btu Conversion initiatives with near-zero emissions and carbon storage. Through fl agship projects such as GreenGen in China, the COAL21 Fund in Australia and the Vision21 and FutureGen initiatives in the United States, Peabody is advancing energy security, economic growth and environmental solutions.

Land is life to Native Americans of the Southwest, essential for practicing religious, cultural and traditional obligations. The Black Mesa has been a

revered homeland to the Hopi and Navajo people for generations. The scenic plateau of piñon and juniper trees has also been the site of major Peabody operations since 1970.

Out of respect for the Navajo and Hopi, Peabody committed to reclamation practices to help preserve their traditional land use and way of life when the company fi rst entered into a business partnership with the two tribes. Peabody’s mining activities have brought signifi cant economic benefi ts, injecting nearly $3 billion directly into the regional economy and creating hundreds of jobs and tens of millions of dollars in annual tribal revenue during nearly 40 years of operations.

Long before reclamation activities were required by law, the company also created a model for sustainable practices on the Mesa that is recognized around the world. Peabody’s reclamation program currently returns land to a condition that is up to 20 times more productive for livestock grazing than native range. The company also preserves traditional practices that are core to Navajo and Hopi culture through a fi rst-of-its-kind cultural plant program that restores plants and herbs for important medicinal and ceremonial needs.

he modern environmentat l movement may have begun on the fi rEarth Day in 1970, but Peabody had long been greening Americ

one tree at a time through Operation Green Earth. This innovative reclamation program embraced a simple, but crucial premise that rem

he modern

U.S.President Jimmy Carter signed sweeping legislation for

restoration of mined lands in 1977 that formalized many of the same innovative environmental practices that Peabody pio-neered two decades before. The Surface Mine Control and Reclamation Act (SMCRA) was created to “strike a balance between

protection of the environment and the nation’s need for coal.” Through close cooperation among researchers, industry and regulatory agencies, the company expanded stewardship programs to restore mined lands to their ‘approximate’ original condition, creating hardy woodlands, pristine wetlands, productive rangeland and popular recreation areas. In the next 30 years, the industry delivered nearly 30 billion tons of coal, planted hundreds of millions of trees and reclaimed more than 2 million acres. Peabody’s reclamation practices are recognized among the best in the world, typically restoring land to superior condition.

rfoenneMw

protection of the environment

fen

Reclaimed lands at Lynnville Mine

in Indiana are restored to vibrant life,

providing vital wildlife habitat.

Long before reclamation activities are required by law,

the company creates a model for sustainable practices

at Black Mesa.

Peabody’s “Operation Green Earth” initative reclaimed thousands of acres for recreation, farming and wildlife, including this wooded waterside retreat in Kentucky.

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thto

uhn ha

Athinttthha

Japanese visitors from Peabody

equity partner Mills & Mitsui explore

the Moura Mine.

A shovel expertly removes coal at Moura Mine, Peabody’s fi rst international operation and the largest export mine in Australia in the 1960s.

As global coal demand accelerated, Peabody made its Wall Street debut under the ticker symbol BTU in

May 2001, launching one of the most successful initial public offerings of the year on the New York Stock Exchange. The public offering created $452 million in proceeds, positioning the company for growth. As of May 2008, the company’s market value has increased tenfold from its IPO.

I t was the longest coal haul on record… spanning 5 million miles from John F. Kennedy Space Center at Cape

Canaveral… through the cosmos… and back to earth. The coal, from Peabody’s North Antelope Rochelle Mine, took a trek on board U.S. Space Shuttle Discovery in a hands-on science partnership with the National Aeronautics and Space Administration in 2001.

The shuttle carried materials for experiments designed by 300 elementary through high school age students from eight schools in the St. Louis area. On its return to earth, a battery of tests were performed on the coal by students at Parkway Central High School to determine if the extreme temperatures could manipulate the volume and density of the coal. Alas, the shuttle delivered no diamonds… only Peabody coal that is out of this world.

Peabody’s market value increases tenfold after the company’s 2001 IPO, making the company one of the top 10 performing investments in the S&P (Standard & Poor) 500.

eaatetP

In what must be the longest coal haul on record,

Peabody’s coal rockets into outer space

on board the U.S. Shuttle Discovery as part of

a hands-on science partnership with NASA.

T he 1980s marked Peabody’s well-timed transition to large, effi cient surface operations in the

American West. The company recognized increased demand for low sulfur coal and in 1983 and 1984 opened the North Antelope and Rochelle mines in the heart of Wyoming’s Powder River Basin. The highly effi cient operations later merged to create the world’s largest coal mine, annually producing more than 90 million tons of coal from coal seams that can tower 80 feet.

Following a major entry into the Powder River Basin, Peabody again demonstrated its mastery of markets, setting its sights on Appalachia before demand for the region’s high-quality metallurgical and steam coal surged. The company purchased Armco’s West Virginia mines in 1984 for $257 million, forging new contracts with northeastern utility companies. Three years later, the company formed its Eastern Associated Coal subsidiary from Appalachian acquisitions. Peabody relocated its headquarters to Henderson, Ky.

Peabody expands westward, opening Peabody’s North Antelope and Rochellemines in the early 1980s.

i 1950 d f i ti

Peabody is leading global initiatives toward near-zero emissions through GreenGen in China, the COAL21 Fund in Australia, and as a long-standing supporter of the Vision21 coal projects in the United States.At the 1893 Chicago World’s Fair, Thomas Edison gave Americans their fi rst glimpse

of a miraculous invention: an electric generator that transformed coal into clean, bright light. By the late 1890s, small coal-fueled generating stations dotted many U.S. cities. Francis also pioneered the long-term contract, striking an agreement in 1903 to provide a stable, affordable supply of coal to the electric plants of Chicago. This model is still in use today.

F i Th Edi A i th i fi t li

Electric lights were once novelties, showcased at turn-of-the-century “electric shows” like the Chicago event pictured above. Peabody’s low-cost coal swiftly brings electric power to consumers.

E“elo

Inventor Thomas Edison helps

bring electricity to the world.

A 1950 drawing depicts

the many uses for coal.

2200111122222200000000000888

stewardship Greg also brought a pow

Greg Boyce’s arrival at Peabody in 2003 launches a period of record-breaking performance.

Peabody’s championship fi rst aid

team of 1938 from Centertown,

Ky., poses for the camera with

their supplies.

F irst manufactured in 1911 by Marion Power Shovel Company of Marion,

Ohio, the rail-mounted and steam-powered shovel quickly became the workhorse of surface mining, carving through coalfi elds with 1.25-cubic-yard dippers.

The earliest shovels inspired awe in onlookers, but nothing equalled the impact of Peabody’s 3850-B shovel. The company initiated this breakthrough in mining machinery after a valued customer – the Tennessee Valley Authority – began building the Paradise Plant in the late 1950s near Drakesboro in western Kentucky.

Peabody knew that the electric generating station would require enormous quantities of coal from the company’s neighboring Sinclair Mine. In a bold move to boost production at Sinclair, the company commissioned Bucyrus-Erie in 1959 to produce a shovel twice the size of any then in operation. The result is the 3850-B, then the world’s largest mobile land machine.

Affectionately known as the Big Hog, the shovel was the pride of Sinclair, towering 90 feet higher than the Statue of Liberty and swinging a 210-foot-long boom as tall as the deck of the Golden Gate Bridge. The Big Hog was as productive as it was massive: its 115-cubic-yard bucket is capable of removing 173 tons of material, depositing it 420 feet away and swiveling back within an unheard of 50 seconds. Such was the shovel’s success that Peabody installed a sister machine at the River King Mine near Freeburg, Ill., in 1964.

Today the development of the 3850-B is remembered as an unrivaled feat of engineering and the start of a new era of technological innovation in the nation’s mining industry.

kesboro in western Kentucky.

A staple of surface mining, the earliest steam-powered shovels roll along rail lines.

Caballo Mine Celebrates Its 500 Millionth Ton of Production

Peabody Boosts Export Capacity with Coal Terminal Investment

Peabody Fuels the College Dreams of Navajo and Hopi Students

Around the world and back again… That’s how far 500 million tons of coal would stretch end-to-end,

carried by 4 million railcars. Peabody’s Caballo Mine in the Powder River Basin reached this remarkable production milestone in April 2008.

A Union Pacifi c train carried the mine’s 500 millionth ton by rail to American Electric Power Company’s Cook Coal Terminal in Illinois for eventual shipment by barge to Indiana-Michigan Power Company’s Rockport Generating Station in Rockport, Ind.

Peabody is the largest coal producer in Wyoming’s Powder River Basin, with 2007 sales of nearly 140 million tons. During the life of the Caballo Mine, roughly 29,000 Union Pacifi c and Burlington Northern Santa Fe trains have been loaded with Caballo’s coal.

Opened in 1978, the Caballo Mine began shipping low sulfur coal to American Electric Power the following year. The Rockport Station receives approximately 2.5 million tons of Caballo’s coal annually, joining nearly a dozen coal-based utilities that use the mine’s product to deliver affordable

Peabody is increasing its equity ownership in the DTA coal terminal to 37.5 percent, boosting the

company’s export capacity at one of the nation’s busiest coal ports. The terminal, located at Newport News, Va., has an annual capacity of 20 million tons of coal.

Peabody’s investment increases the company’s throughput capacity by approximately 6 to 7 million tons per year. It’s among several projects Peabody is pursuing to boost throughput at a time when global demand for seaborne coal is surging. Net U.S. coal exports are expected to more than triple between 2006 and 2008, and the company expects to double its U.S. exports in 2008.

“Peabody is one of the world’s largest coal traders, and we continue to increase exports to leverage a strong global pull for our products,” says Stephen Miller, President, COALTRADE. “Peabody has committed to

energy to millions of households and businesses throughout the United States.

Last year, Caballo’s 460 employees shipped 31 million tons. “Caballo’s 500 millionth ton is a signifi cant

accomplishment at a time when energy demand is reaching record highs,” says Kemal Williamson, Group Vice President for Western Operations. “My hat’s off to employees who all worked so hard to make this happen safely and effi ciently.”

To boost export capacity, Peabody has increased its stake in DTA, one of the busiest coal ports in the United States.

Every Caballo employee received a hardhat decal to commemorate the date the mine shipped its 500 millionth ton: April 21, 2008.

Caballo employees celebrate the mine’s 500 millionth ton of production, posing before the Union Pacifi c train that carried coalto American Electric Power Company’s Cook Coal Terminal. Employees are pictured from left: Shirley Aldridge, Pam Binns,

Tonya Young, Brenda Johnson, Lee McClure, Kathy Egli, Leroy Dike, Audry Rappleyea, Scott Durgin, Donnie Fullenwider, Jeff Kucera, Dennis Dutcher, Dennis Campbell, Harold Jenkins, Lindy Engle, Roberta DeMott, Quentin Strand,

Richard Harborth, Tim Toth, Barb Chiles, Dave Allison, Sue Kuhrt, Bob Grant, Ben Ortiz, Jim Locke and Larry Reynolds.

The Rockport Station ximately

of Caballo’s coal g nearly aed utilitiesne’ser

energbusines

Last year, C31 million tons. “Caballo’s

ed o e date its 500 il 21, 2008.

Caballo employeesto American Ele

Tonya YoungJeff Kuce

Richa

more export coal shipments in the fi rst three months of 2008 than it did in the past two years combined.”

DTA combines effi cient, high-speed coal handling with sophisticated sampling and blending systems. The terminal expects to handle as much as 15 million tons of export coal in 2008, or roughly double last year’s throughput.

The investment in DTA follows Peabody’s recent moves to expand export capacity globally. As a participant in the Newcastle Coal Infrastructure Group, the company is adding signifi cant dedicated throughput in New South Wales, Australia, through a major port infrastructure project.


Peabody’s Kayenta Mine is operated through lease agreements with the Navajo and the Hopi, producing more than 8 million tons of low sulfur coal annually for shipment to the Navajo Generating Station near Page, Ariz. Mining on Arizona’s Black Mesa has injected more than $2.8 billion in direct economic benefi ts into Navajo and Hopi communities through coal royalties, business payments, taxes, wages, benefi ts and charitable contributions since the operations began nearly 40 years ago.

As any cash-starved student will tell you, earning a scholarship is like winning the lottery. And for

20 years, Peabody has been making dreams come true for the hard-working students of the Navajo and Hopi tribes near the company’s Kayenta Mine in Arizona. This spring, the company presented $356,000 in scholarship funds to tribal students pursuing college and careers, adding to the nearly $7 million the company has contributed to date for Navajo and Hopi education.

“Helping young people pursue higher education has been a longstanding commitment for Peabody,” says Rob Hammond, Peabody’s Group Executive for Southwest Operations. “Our scholarship program in the Southwest has enabled hundreds of bright students to study at some of the nation’s most prestigous universities.”

Peabody has a proud tradition of funding scholarships for hard-working Navajo and Hopi students.

PEABODY CELEBR

Peabody has been going strong

since its founding in 1883.

What started as a small Chicago-

based retail coal brokerage is

now entering its 38th year of

global industry leadership.

Peabody is the world’s largest

private-sector coal company

and the international leader in

clean coal technologies. Join

Conveyor as we explore our

past and look forward to the

future in the following full-color,

fold-out poster.


Have a memory to share or a memento from Peabody’s early days?

Please contact: Meg Gallagher Corporate Communications

[email protected]


ATES 125 YEARS Peab

Peab

carried by 4the Powder milestone in

A Union ton by rail toCoal TerminIndiana-MicStation in Ro

PeabodyPowder Rivetons. DuringUnion Pacifi been loaded

Opened sulfur coal tfollowing yereceives app2.5 million tannually, joidozen coal-bthat use the product to daffordable

eabodDTA c

company’s coal ports. has an annu

Peabodythroughput per year. It’sto boost thrseaborne coto more thacompany ex

“Peabodand we constrong globPresident, C

Every Caballoemployee reca hardhat deccommemoratthe mine shipmillionth ton:

s any scho

20 years, Pethe hard-wonear the comthe companytribal studennearly $7 mNavajo and

We salute Team Peabody for breaking new ground: BTU is the fi rst coal company to rank number one in FORTUNE®

Magazine’s list of “America’s Most Admired Companies” for the industry. Our rock solid performance made us

number one in every category: Financial Soundness, Innovation, Long-term Investment, People Management,

Product and Services Quality, Social Responsibility and Use of Corporate Assets. The honor goes to the more than

7,000 employees whose hard work and dedication made this achievement possible.

Thanks BTU... and Rock On.

Peabody Energy Corporation 701 Market Street St. Louis, MO 63101PeabodyEnergy.com


Peabody Seeks to Help Mongolian Deserts Bloom

“F ew camels, fewer people and limitlessopportunity.” That’s how Tayeb Tahir describes

Omnogovi Province in southern Mongolia, home to thevast coal reserve of Tavan Tolgoi.

The desert plateau was a hot discussion topicwhen the President of Peabody China recently met withMongolian President Nambaryn Enkhbayar and topoffi cials in the Mongolian capital city of Ulaanbaatar.Peabody was granted a rare audience to address howthe company could help the Mongolian people realizetheir goal of developing a world-class coal industry.

The Tavan Tolgoi reserve lies beneath a high desertplateau in a region remarkably similar in topography andgeology to the Powder River Basin in the United States.The trip is one in a series of exchanges helping to advancea long-term business partnership.

“Tavan Tolgoi has enormous potential,” says Tayeb.“We believe metallurgical and thermal coal may be abundantbeneath the Mongolian desert. As a partner, we bringthe advantage of leading safety, mining and stewardshippractices that are recognized around the globe and alsoby the Mongolian leadership.”

Sandwiched between Russia and China, this landlockednation of open spaces is encouraging more internationalinvestment in a bid to diversify its economy. Mongolianoffi cials believe development of Tavan Tolgoi’s coalresources will be key to the nation’s long-term economicsuccess. They are seeking a consortium of foreign partnersto further this project.

Peabody brings 125 years of expertise as a mining leaderand offers superior safety and operational practices. Withinthe past year, Mongolian offi cials have made two high-profi le visits to observe Peabody’s operations in Wyoming.And the company has opened an offi ce in Mongolia topursue business development opportunities.

“We’re interested in forging a lasting partnership,” saysCartan Sumner, Director, International Government Relations.“Peabody will bring strong advantages to any collaboration.We are a world-class mining company with unique experiencein balancing economic, environmental and cultural goals.”

Peabody’s decades-long experience workingcooperatively with tribal people on Arizona’s Black Mesaoffers a compelling example: The company has earnedinternational acclaim for its sustainable practices on theMesa, many of which represent fi rst-of-a-kind innovations.

Black Mesa is home to the Navajo Nation and HopiTribe, who prize collecting herbs and plants for traditionaland medicinal purposes. Long before laws were establishedto require reclamation, Peabody committed to restore tribal

Amar worked with Reclamation Manager for EnvironmentalServices – West Vern Pfannenstiel to analyze the area’sconservation and land use needs. The pair found plenty ofparallels between the native peoples of the U.S. Southwestand the Mongolian steppes.

“The people of Tavan Tolgoi may live about 6,000 milesfrom Arizona, but culturally and historically they’re closer tothe Navajo and Hopi experience,” Amar says. “Mongolia is thebirthplace of Genghis Khan and the origin of one of the greatempires and cultures in world history.

“It is also a place where people are closely tied to the landand steeped in century-old traditions that they understandablywant to preserve. Peabody can help Mongolians advance theireconomy and sustain their heritage.”

Mongolian offi cials observe Peabody employees at the North Antelope Rochelle Mine’s state-of-the-art dispatching center.Peabody organized the visit to demonstrate the company’s mining expertise and commitment to a true partnership.

In May, Peabody China President Tayeb Tahir and representativesfrom Peabody Energy met with Mongolian President NambarynEnkhbayar to discuss the development of coal resources in Mongolia.


rangelands, pioneering what has become a world-renownedprogram to restore native plants that have medicinal,ceremonial and cultural value. Mining in the region createshundreds of skilled jobs, tens of millions of dollars inannual tribal revenue and a legacy of stewardship thathas tremendous value to the local people.

The experience is relevant to the issues facing residentsof Tavan Tolgoi, says Amar Sharkhuu, an engineer at theLee Ranch Mine in New Mexico and a native of Mongolia.

China will account for fully 20 percent of the world’senergy demand by 2030. Galloping economic growthmeans that China is likely to overtake the United Statesin energy consumption in as little as two years,according to IEA forecasts.

China’s appetite for low-cost energy is being met withcoal. The nation added more coal-fueled generation thispast year than the entire capacity of the United Kingdom’selectric grid. At the same time, China has increased capitalinvestments in coal-to-liquids projects in a bid to reduceits dependence on foreign oil.

These developments are historic, according to TayebTahir, President of Peabody China: “China must rely on coal topower its future growth, but, like nations throughout the world,China also recognizes a need to balance energy demand withenvironmental sustainability.

“Clean coal technology will enable the world to advanceboth energy and environmental needs. GreenGen is real, andit’s happening now.”

“Peabody is the global leaderin clean coal solutions,and GreenGen is among

several fl agship initiatives weare advancing to addressconcerns about climate”

Greg BoyceChairman and Chief Executive Officer

The company has opened a Beijing offi ce and begancoal trading in China last year.

Coal-fueled generation is responsible for nearlytwo-thirds of China’s power today, and theInternational Energy Agency (IEA) estimates that

Peabody is the only non-Chinese company to participatein GreenGen, a multi-phase, coal-fueled power plant that seeksto achieve near-zero emissions and carbon management.It’s China’s most important climate initiative and scheduledfor groundbreaking this year.

Peabody Joins China’s Ultimate Carbon Initiativecontinued from page 3

“We’re interested inforging a lasting partnership.

Peabody will bringstrong advantages to any

collaboration.”Cartan Sumner

Director of International Government Relations

S teve Bushart can sum up Peabody’s new, state-of-the-art Twentymile Preparation Plant in three words: “It’s

the future,” says the Project Manager. The $22 million project is also ramping up in the

present. To enhance the quality of the coal at theTwentymile Mine near Hayden, Colo., Steve and theproject team built the largest operating preparationplant west of the Mississippi River in less than12 months. The 1,400-ton-per-hour facility was builton schedule, on budget and without a single lost-timeaccident. It will complement an existing, 300-ton-per-hour preparation plant.

The Twentymile plant arrives at a critical time for oneof America’s largest longwall operations. With a one-million-ton monthly productivity capacity, Twentymile Mineis poised to meet record demand for its high-Btu,steam coal. The mine has just entered exportcontracts to supply utilities as far away asEurope. “The prep plant is a win-win,”says Steve.

“It gives us greater fl exibility to meet customer qualityneeds and opens new markets for our product.”

While the average U.S. preparation plant handles 870tons per hour, the Twentymile plant is capable of processingnearly two times that amount. The facility partially washescoal, sending larger material through cyclones and cleaningcircuits. Scalping screens allow fi ne raw coals to bypassthe washing process. All processed coal less than one inchin size is mechanically dewatered in centrifuges, and a rollcrusher achieves a 2-inch product.

The plant’s spacious, “low profi le” design also featuresthe latest technology. A remote-controlled, 25-ton overheadcrane travels the length of the plant, enabling employees toaccess equipment throughout the plant. Such automationenhances effi ciency and improves safety.

Motors boast visible “disconnects”– or outside switches –that allow employees to safely and speedily

de-energize equipment on location ratherthan at a remote lock-out tag-

out station.

Wash plant operators Travis Johnson (left) and Dave Hahn trackperformance at the new Twentymile Preparation Plant.

“Thirty years ago, prep plants had lots of movingparts to manage,” says Phil Davis, Director of CoalPreparation Support and Quality Control. “Since thenwe’ve opened up the plant floor and moved larger,more efficient, automated equipment inside. We’rebasically doing more with fewer parts. And it’s payingoff at Twentymile.”

Peabody Goes the Extra Mile for Twentymile Customers

Peabody’s new Twentymile Preparation Plant near Hayden, Colo.,was built on budget, on schedule and 7,000 feet above sea level.


Growing, Global and Green: Meet The New BTUcontinued from page 2

Peabody’s London COALTRADE offi ce is part of a growinginternational trading platform. The company has tripled itsinternational activities this past year.

The Governor of Wyoming recognized North Antelope

Rochelle Mine (NARM) as the safest operation in the state.And in Australia, employees improved their lost-timeaccident rate by more than half, due in large part to thecontribution of new mines that joined Peabody throughthe Excel acquisition.

Leadership starts with each one of us. As we movethrough 2008, I would ask every employee to re-energize yourcommitment to safety. Take greater accountability for yourown safety and the safety of your peers. We will continue toaccelerate safety observations, safety audits and riskassessment programs. Let’s make this year our safest as wework to achieve the ultimate goal of zero incidents of any kind.

Conveyor: Peabody is advancing a vision of near-zeroemissions through a variety of global clean coal initiatives. Weare a long-time supporter of FutureGen and Vision21 in theUnited States; we’re a leader in Australia’s COAL21 Fund; andwe recently became an equity partner in China’s GreenGeninitiative. How do these efforts fi t into your vision for greateruse of clean coal to create energy security around the world?

Greg: Fueling the world’s energy needs using clean coal

is central to Peabody’s mission. Our vision is to achieve

near-zero emissions from coal, and we are the global

leader in advancing a number of voluntary initiatives to

commercialize clean coal technologies and address concerns

about climate. Chief among these is GreenGen, a commercial

prototype southeast of Beijing that will generate energy with

near-zero emissions and carbon storage. Peabody is also a

founding member of the COAL21 Fund, a near-zero emissions

technology initiative in Australia that is driving multiple clean

coal demonstration projects. And the company has been

a long-standing supporter of the Vision21 and FutureGen

clean coal and carbon management projects in the United

States. We will continue to advance projects as a partner

and equity participant to achieve our ultimate goals.

Conveyor: Peabody Peak Performance – P3 – is aboutachieving best-in-class results at every level. What progressdid we make this past year and how do we continue to growand build on our success?

Greg: P3 is about driving down costs and increasingeffi ciencies as part of a culture of continuous improvement.Our focus this past year has been on establishing Centers ofExcellence (COE) to increase productivity and results acrossoperations, commercial, sourcing, engineering and capitalareas. Each COE uses a team-based approach to achieve neweffi ciencies, refi ne best practices and lower costs.

Often the team implements ideas from mine employees.For example, an Operations COE at NARM implemented anemployee suggestion to begin parking trucks parallel to eachother during shift change. The move created a half-millionton-per-year production improvement opportunity. Other bestpractices at NARM are realizing a 15 percent improvementin overburden productivity and 24 percent improvement intruck hauling capacity. Dozens of productivity initiatives areexpected to result in considerable savings each year,demonstrating a standard of excellence being implementedat each operation in the United States and Australia.We’ve introduced three new Operations COE efforts thisyear at the Wambo Complex in Australia, Lee Ranch inthe Southwest and Cottage Grove in the Midwest.

Conveyor: Discuss Peabody’s long-term operating andjoint-venture opportunities in high-growth international marketssuch as China, Mongolia and Mozambique.

Greg: China’s double-digit economic growth has foreverchanged supply dynamics in our industry.

The Chinese are building the equivalent of two power plantsa week, adding what amounts to the entire United Kingdompower grid in coal-fueled generation last year alone. Suchgrowth creates a pull on global markets, with demand fromBeijing reaching south to Australia and as far west as Wyoming.

Peabody’s Beijing team is working with a numberof major partners to pursue coal-related projects andcommercial opportunities in China. We’ve opened arepresentative offi ce in neighboring Mongolia, and weseek to help develop a world-class coal industry in oneof the richest and largest untapped coal reserves inthe world. We’re also working with the government ofMozambique, Africa, to explore commercial prospects.

And… this is important… even as we grow globally,our business is built locally. Every day gives us a newopportunity to earn our reputation for world-class safety,productivity, stewardship and customer service. That,beyond anything, opens doors.

Conveyor: As demand from the Pacifi c Rimsoars, export markets have tightened dramatically.Describe how Peabody’s trading activities and brokeragearrangements have evolved to capitalize on thisunprecedented market environment.

Greg: Our markets are becoming more globallyinner-connected than ever before. Peabody has the mostglobal exports of any U.S.-based company, and we havetripled our international activities this past year, trading morethan 167 million tons of coal. We also expanded trading inAustralia and the United States, opened an offi ce in Chinato broker coal in the world’s fastest growing economy andstarted a European trading offi ce to serve our customers inthe most liquid and mature of global trading markets. Weoffer customers a one-stop sales, trading and transportationnetwork, around the clock, around the world.


PEABODY’S

Peabody and its Australian partners are creating electricity from thin air… literally.

As a member of the Australian Coal Association Low Emissions Technology group (ACALET), the company is helping to pilot oxyfuel, an oxygen-based generation technology using clean coal.

ACALET is a public-private partnership formed to demonstrate a range of clean coal technologies with near-zero emissions and carbon capture. In 2006, the organization formed the COAL21 Fund to fi nance these initiatives. In addition to Peabody, the fund has attracted a number of high-profi le donors, including the Asia-Pacifi c Partnership on Clean Development and Climate, a voluntary pact among seven major countries to address environmental issues. Participation is based on annual production, with Peabody contributing approximately $4.5 million in 2007. The company will continue to fund the project annually.

The fi rst initiative to receive support is a fi ve-year $200 million oxyfuel project at the Callide Power Plant in Central Queensland near the Port of Gladstone. This innovative technology reduces carbon dioxide by combusting coal with oxygen, creating a nearly pure stream of CO2 that can be effi ciently captured and stored.

Oxyfuel will be piloted on a 30-megawatt coal-fueled unit at Callide and is set to begin generating electricity by early 2009. In a later phase, the plant will store carbon in deep underground formations.

The project is particularly appealing because it advances technology that can be retrofi tted on the existing fl eet of power plants in Australia and around the world.

“Fueling the world’s energy needs using clean coal

is central to Peabody’s mission,” says Julian Thornton, Managing Director of Australia Operations. “Commercializing technology with advanced near-zero emissions is a center-piece of our strategy to create clean energy solutions as the world demands more and more power.”

The partnership is pursuing clean coal technologies on multiple fronts. The job of evaluation and technical

review falls to Peabody’s representative on the ACALET Board of Directors, Julie

Beeby, General Manager of Stra-tegic Planning and Projects.

Julie ensures that contribu-tions are used to the best possible advantage.

“We have to prove that what works in theory will succeed in practice,” Julie says. “That’s why ACALET’s strategy is so smart:

By fi nancing multiple demonstration projects in

collaboration with govern-ment and other industry

players, we are maximizing our chances of success.

“I’m proud to play an active part in supporting the development of technologies to address our energy supply and climate change challenges.”

Peabody Leads 21st Century Energy Solutions in Australia

At Peabody locations around the world, employees are demonstrating the spirit of our mission to “power economic prosperity and result in a better quality of life.” In this issue of Conveyor, Peabody recognizes the many Australian employees who have given time and money to help others in need. Conveyor encourages you to share your stories by e-mailing [email protected].

On your mark, get set... grow. And may the best man... er, “mo”... win.

With speed of the essence, employees at Peabody’s Australian Operations joined a drive to support Movember, a fundraiser for men’s health named after the “mo,” Australian slang for the moustache. Men grow beards or moustaches to raise money, while female “Mo Sistas” contribute cash and organize events. In 2007, the National Movember Foundation donated more than $13 million to the Australian Prostate Cancer Foundation and BeyondBlue, a national initiative to address depression.

Peabody employees raised thousands of Australian dollars individually and through teams such as the Peabody Pirates at the company’s COALTRADE Australia offi ces and the Wilkie Handlebar Hanks at the Wilkie Creek Mine in Queensland.

Movember rules require that all mos be grown from scratch in 30 days – a mandate that allows for plenty of artistic expression. Among the Peabody COALTRADE Pirates, Brisbane-based Marketing General Manager Justin Williams, opted for a minimalist mo. In contrast, the Newcastle-based Pirates went for something a touch more attention-grabbing: Marketing Manager Tommy Raad grew a swashbuckling mane and his colleague, Marketing General Manager Scott Knights, went for a look some of his teammates likened to Tom Selleck’s famous moustache in “Magnum P.I.”

Scott bristles a little at the comparison: “My wife certainly didn’t think much of it, and a number of people pointed at me and laughed quite a lot that month.”

A number of women also found a way to participate. Like many, Kellie McIntosh, Wilkie Creek Production Clerk, got involved by organizing a fundraiser. Kellie’s Family Day at Wilkie Creek Mine featured everything from cricket and a barbecue to a contest for best mo. The winner – sporting an exceptionally well-trimmed specimen – was Senior Geologist Phil Bryant.

AAt Peaeabobody locations around the world, employees are demoonsn tratating the spirit of our mission to “power economic prosperiityty and result in a better quality of life.” In this issue

HOMETOWNHEROES Australia Becomes

Mo Man’s Land for Charity

Alas, one Peabody mo was removed before its prime. In a moment of forgetfulness, Pirate and Peabody COALTRADE Managing Director Scott Twose shaved his growth very early one morning while preparing for a business trip.

Most others were ready for a shave within a month. Scott Knights, for one, recalls gladly removing his mo at about 5 minutes to midnight November 30. “If you’re not used to it, it tends to get quite itchy,” he explains.

Regardless of their fashion choices, Peabody’s Movember participants are proud to have donated money to fund treatment and prevention efforts for prostate cancer and male depression. Statistics show that Australian men are less healthy than women and are less likely to seek appropriate medical attention.

With the help at companies such as Peabody, the National Movember Foundation is raising new awareness about these and other men’s health issues.

Peabody Australia employees display the moustaches they’ve grown to raise funds for men’s health.

Phil Bryant,

winner of Wilkie

Creek Mine’s best mow

Justin Tanks,Wilkie Creek Mine

Through its participation in Australia’s COAL21 Fund, Peabody is helping to support an oxyfuel demonstration project at the CS Energy Callide A power plant in Central Queensland. Oxyfuel is the fi rst in a series of clean coal technologies to be tested as part of the initiative.

JWi

Jeremy Teece,

Wilkie Creek Mine


C O L O R F U L C O M M E N T A R Y

W A T T S U P

P eabody employees are keeping the fl ashbulbs poppingwith a series of award-winning innovations:

• Dave Byer, Senior Manager of Quality Control and Contract Labs, received the 2007 R.A. Glenn Award from the American Society for Testing and Materials (ASTM), one of the largest and most widely followed international standards systems in the world. Dave was recognized for his outstanding contributions to the development of standards for coal and coke testing.

• Michael Creech received national recognition for his discovery of Anvil Hill, a major open-cut resource in the coal-rich Hunter Valley region of New South Wales. Australia’s New South Wales Coalfi eld Geology Council honored the Manager of Geology and Resources with its 2007 Excellence in Coal Geology Award for his discovery. Part of Australia’s Wybong uplands, Anvil Hill is home to one of the largest coal deposits discovered in recent years.

• Midwest Region Reclamation Manager Ken Rogers won the 2007 Vance “Pat” Wiram Award for Innovation in Reclamation and

Mining Technology from the Indiana Society of Mining and Reclamation. Ken was honored for pioneering best practices to restore productive farmland, the highest land reclamation use. The society also rec-ognized him for reintroducing a blight-resistant American Chestnut tree on reclaimed

lands and showing leadership on the

Indiana Soils and Prime Farmland Team, an organization that seeks to improve public perception of the industry through education.

• The Miller Creek Mine earned the 2007 Excellence in Mining and Reclamation Award from

the Indiana Department of Natural Resources for reclaiming nearly 1,100 acres of highly productive

farmland and wildlife habitat at its Sugar Ridge Pit in South Central Indiana.

Congratulations to employees for demonstrating the principles of our mission to be a leading worldwide producer

and supplier of sustainable energy solutions, which power economic prosperity and result in a better quality of life.

Peabody Employees Earn Honors for Bright Ideas

Coal Can Do That… Even Better

Readers share their comments about Conveyor’s ongoing coverage of safety, performance, stewardship and growth. Conveyor appreciates your feedback and looks forward to more of your input.

Tom NelsonPrewitt, N.M.“I always enjoy the articles. The Hometown Heroes article was a nice tribute.”

Jacobey K. DavisRosiclare, Ill.

I like to hear what is going on with Peabody in Australia and also that our safety has been a whole lot better than many other places I have worked. Our mines at Arclar have been running really smoothly.

G. J. “Joe” Hatfi eld Festus, Mo.

This magazine is well done, and I like the focus on Peabody people. I retired in 2005 after 32 years of service and was a Peabody scholarship recipient in 1969. I feel coal people are the hardest working and most loyal in any industry. Keep up the great work.

Eugene MerrimanBicknell, Ind.

I really enjoyed the latest issue of Convevor. I would like to see an article in the future about the ways Peabody is going to attract and retain employees in the Midwest... I would like for an article to focus on the underground side of Peabody in the Midwest.

Dennis BarldeyCraig, Colo.

I read the magazine. It lets me know the world inside and out. I’m a new miner and have been with Peabody for a little over a year now. Every day I go to work, I enjoy my job, meet new people and can actually see what we all produce at Twentymile as a team.

Update: In the fourth quarter issue, Conveyor’s listing of mines with zero reportable accidents should have recognized Viking and Francisco for completing the fi rst three quarters of 2007 without a reportable accident. The mines were Peabody’s safest last year.

Reclamation Manager Ken Rogers (right) receives the 2007 Vance “Pat” Wiram Award from Joe Craig of the Indiana Society of Mining and Reclamation Board of Directors. He was honored for innovation in reclamation.

I we want immediate answers. And the new CoalCanDoThat.com makes facts about coal-fueled energy easy to fi nd.

The enhanced coal education website features everything from interactive videos and an up-to-date news ticker to an online library of the latest energy studies.

Visitors can sign up to receive regular updates by e-mailing [email protected]. Type “Register” in the subject line. This fun, user-friendly site advances coal as the answer for energy security, economic growth and environmental solutions: what Peabody calls the “3Es.”

PEABODY AND GREATPOINT

PURSUE COAL TO NATURAL GAS

Peabody has acquired a minority interest in GreatPoint Energy, a company that is pioneering a clean coal-based alternative to expensive natural gas imports. The investment is part of Peabody’s program to help commercialize emerging clean coal technologies through venture capital and equity partnerships.

GreatPoint’s proprietary Bluegas™ technology transforms coal into ultra-clean pipeline quality natural gas while providing for carbon storage. Gas from the company’s single-stage catalytic process is 99.5 percent pure methane and can be transported throughout North America utilizing the existing natural gas pipeline infrastructure. The technology could be commercialized for power generation, residential and commercial heating and chemical manufacturing.

As part of the agreement, Peabody and GreatPoint Energy will evaluate the potential for development of joint coal gasifi cation projects using Peabody reserves and land.

A rendering of GreatPoint Energy’s planned state-of-the-art coal-to-gas facility.

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