Peabody Energy and Xinjiang Government to Pursue Development of 50 Million Ton-Per-Year Surface Mine In Xinjiang, China

By Peabody Energy, PRNE
Wednesday, July 13, 2011

XINJIANG, China, July 14, 2011 -


Peabody Energy (NYSE: BTU) and the Government of the Xinjiang
Uyghur Autonomous Region today entered into a framework agreement
to pursue development of a state-of-the-art 50 million-ton-per-year
surface mine that would operate over multiple decades.

The agreement was signed today during a ceremony in the Xinjiang
capital of Urumqi with Peabody Chairman and Chief Executive Officer
Gregory H. Boyce, Peabody Senior Vice President Fredrick D. Palmer,
Peabody President of Asia Zhenchun Shi and senior Xinjiang
government officers.  Party members involved in creating the
agreement include Party Secretary Zhang Chunxian, Governor Nuer
Baikeli
and Vice Governor Kurexi Maihasuti.

“Peabody is honored to work with the Government of Xinjiang to
advance a world-class large-scale surface mine in the world’s
largest and fastest-growing coal market,” said Boyce.
 ”Together we can unlock the full benefits of Xinjiang’s vast
energy resources to supply essential energy and benefit the region
through job creation, economic development and social
responsibility.”  

“We sincerely expect that Peabody, through its application of
the world’s most advanced mining techniques, management systems,
and environmental protection and safety standards, will develop
this cooperation program to become China’s and even the world’s top
modern coal mine,” said Governor Baikeli. “The Communist Party of
China Xinjiang Regional Committee and the Xinjiang People’s
Government will fully support Peabody’s development in Xinjiang so
as to start the cooperation program at an early date, which we
believe will generate the best possible returns for both
sides.”

Under terms of the agreement, Peabody would construct, manage
and operate the mine, which would be one of the largest surface
mines in China, using best practices in safety, training,
productivity, resource recovery, environmental standards and land
restoration.  

The Xinjiang Region is China’s largest administrative region
with vast reserves of coal estimated to account for approximately
40 percent of China’s reserves.  The government expects
Xinjiang’s coal output will increase from approximately 100 million
tonnes in 2010 to more than 1 billion tonnes.

A new rail link under construction is expected to be on line by
2013 and will further open the region to China’s fast-growing
energy markets.

In the coming months, Peabody, in collaboration with the
Xinjiang Government, will conduct geologic, engineering and
environmental reviews to select a final location for the facility.
 The Government of Xinjiang has committed to accelerate
allocation of premier coal resources for the project.  

China is the world’s fastest-growing economy and the world’s
largest energy user. The nation is expected to bring online 600
gigawatts of coal-fueled electricity generation by 2035 according
to the International Energy Agency, which would require more than 2
billion tons of coal each year.  This year alone, China is
expected to increase its coal-fueled power capacity by 50
gigawatts, representing several hundred million tons of additional
annual coal use.

Peabody Energy is the world’s largest private-sector coal
company and a global leader in clean coal solutions.  With
2010 sales of 246 million tons and nearly $7 billion in revenues,
Peabody fuels 10 percent of U.S. power and 2 percent of worldwide
electricity.

Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on numerous assumptions
that the company believes are reasonable, but they are open to a
wide range of uncertainties and business risks that may cause
actual results to differ materially from expectations. These
factors are difficult to accurately predict and may be beyond the
company’s control. The company does not undertake to update its
forward-looking statements. Factors that could affect results
include those described in this press release as well as other
risks detailed in the company’s reports filed with the Securities
and Exchange Commission.

CONTACT:
Beth Sutton
(314) 342-7573

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