Peabody Energy Continues Western Coal Mining Growth

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Peabody Energy (NYSE:BTU) (Saint Louis, Missouri) is planning a number of big dollar capital projects to develop coal reserves in the Rocky Mountain Region of the U.S. All in all, about $700 million in capital projects are being evaluated by Peabody in Colorado, New Mexico, Arizona, and Wyoming.

Peabody Energy recently received mine permit approval for the El Segundo coal mine project located near Crownpoint, New Mexico. If built, the El Segundo mine will operate as a satellite mine to Peabody’s Lee Ranch Coal operations. First reported by Industrialinfo.com in 2001 as the South Hospah project, the El Segundo coal mine is envisioned to be a 5 million tons per year mine. Peabody is finalizing coal sales agreements before making final decision to move forward with the project.

Over the years, Peabody has developed a mine-mouth power plant adjacent to El Segundo mine. Current plans involve the construction of a 300-megawatt (MW) power plant, known as the Mustang Energy Center.

In Arizona, the jury is still out on the fate of Peabody Energy’s Black Mesa mine and slurry pipeline expansion projects. About $350 million dollars worth of projects, including the rebuild of the 273 coal slurry pipeline, which delivers coal to the Mohave Generating Station in Laughlin, Nevada, a new coal prep plant, and a new 120-mile water pipeline, all hinge on the fate of the Mohave plant, which is scheduled to cease operations in December 2005.

The biggest development news to come out of Peabody in 2005, is the planned development of a new 40 million tons per year southern powder river basin (PRB) mine, known as the School Creek mine. This project will require its own unit train loadout facility.

At the North Antelope/Rochelle mine complex in Wright, Wyoming, the largest mine in North America, shipping 82.4 million tons of coal in 2004, the company is planning a major near pit extension and blending system addition project in 2006. Near pit extension projects are also being evaluated for other Power River Coal Company mines.

Peabody is also spending $60 million in 2006 to expand its Colorado bituminous mining capacity in 2006. For details see related news article - Peabody Energy Expands Colorado Bituminous Coal Mining

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