Peabody Energy Hopes to Put Money Where its Mine-Mouth Is

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Researched by Industrial Info Resources (Sugar Land, Texas). Things are getting lively in Lively Grove, Illinois. That’s the site for what is more and more looking like the next big mine-mouth power plant project to move to the construction stage. Recently, Peabody Energy Corporation (NYSE:BTU) (Saint Louis, Missouri) reached a number of milestones for the $2-2.5 billion Prairie State Energy Campus, including the announcement of an ownership partnership with CMS Enterprises, which in addition to a 15% ownership will develop and operate the power plant portion of the project. The agreement with CMS means that the project is 83% subscribed. The other recent announcement is the signing of a letter of intent with Bechtel to provide engineering, procurement and construction (E+P+C) for the project.

Peabody has achieved permit approval for both the coal mine and the power plant and hopes to wrap up remaining power sales agreements, and secure financing during the next six months.

The Lively Grove coal mine will be a 6.5 million-ton per year underground mine utilizing room and pillar mining techniques. Coal will be screened and conveyed to the adjacent state-of-the-art clean coal power plant, which will produce 1,500 megawatts.

Peabody Energy is putting together some final budgetary numbers on the project in hope of securing project financing within the next six months. If the project reaches fruition, it will mark the return of high sulfur coal mining in the area. Peabody closed down its nearby Marissa mine in 2000. The Marissa mine, which employed 400, was a casualty of the shift away from high sulfur Illinois coal to cleaner burning western.

In the works for five years (Industrial Info first reported on this project in 2001), the Prairie State project is similar in scope to Peabody’s Thoroughbred Energy project being developed in Kentucky. It looks like Thoroughbred, which was initially proposed first, will take a backseat to Prairie State’s advancements.

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