Peabody Energy Expands Colorado Bituminous Coal Mining

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Twentymile Coal Company, a subsidiary of Peabody Energy (NYSE:BTU) (Saint Louis, Missouri), is proceeding with plans to expand the Twentymile underground coal mine in Oak Creek, Routt County, Colorado, up to an annual capacity of twelve million tons. The mine produced 8.7 million tons in 2004.

During the first quarter of 2006, the company will install a new state-of-the-art $60 million longwall mining system.

Surface facility construction is being designed for a new truck loading station, conveyors, and a batch weighing and loadout system. Another project will involve extending an existing run-of-mine low quality coal conveyor, known as the "rock belt." Work on the surface facility and conveyor projects will not occur until after approvals are received from the Peabody corporate office in 2006.

The company is also evaluating options to expand its existing 300-ton per hour coal washing plant. Currently about 90-92% of the mine’s production is loaded directly on trains. Lower quality coal is washed before it is shipped and the company is evaluating options to expand that capacity.

Peabody had previously announced that it would close its Seneca coal mine -- operated by its Seneca Coal Company subsidiary, also located in Routt County near Hayden, Colorado -- by the end of the year. The Seneca mine has reached the end of its economical mine life and remediation of the mine will begin next year. The Seneca coal mine is located adjacent to the 446MW Hayden Power Station, owned by Xcel Energy, to which the mine supplies about 1.5 million tons of coal per year.

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