Peabody Energy — BrandWiki

Peabody Energy

Overview

Peabody Energy, Inc.

type	Public
traded as	nyse: BTU Russell 2000 Component S&P 600 Component
key people	Jim Grech, President and CEO‡R1R‡
industry	Coal mining
revenue	$4.981 billion (2022) $3.318 billion (2021)‡R2R‡
operating income	US$1.4 billion (2022)‡R2R‡
equity	US$3.3 billion (2023)‡R2R‡
num employees	5,500‡R3R‡
num employees year

Peabody Energy is an American coal mining company headquartered in St. Louis, Missouri.[4][5] Its primary business consists of the mining, sale, and distribution of coal, which is purchased for use in electricity generation and steelmaking. Peabody also markets, brokers, and trades coal through offices in China, Australia, and the United States.

Peabody markets coal to electricity generating and industrial customers in more than 26 nations. It maintains ownership or majority interests in 17 surface and underground mining operations located throughout the United States and Australia.[6] In the United States, company-owned mines are located in Alabama, Colorado, Illinois, Indiana, New Mexico, and Wyoming. Peabody's largest operation is the North Antelope Rochelle Mine located in Campbell County, Wyoming, which mined more than 60 million tons of coal in 2022. Peabody spun off coal mining operations in West Virginia and Kentucky

foundation	1883 (Chicago, Illinois, US)

location	St. Louis, Missouri, US

homepage	peabodyenergy.com

History

Early years (1883–1959)

The Peabody Energy company was founded as Peabody, Daniels & Company in 1883 by Francis Peabody, the son of a prominent Chicago lawyer, and a partner.[10] The company bought coal from established mines and sold it to homes and businesses in the Chicago area. In the late 1880s, Francis Peabody bought out his partner's share of the business and the company was incorporated in the state of Illinois under the name Peabody Coal Company in 1890. In 1895, it began operations of its first mine in Williamson County, Illinois and later expanded its operations in Illinois.[11] In 1913, the company won its first long-term contract to supply Chicago Edison Company, the predecessor to utility Commonwealth Edison.[12] The company's growth continued after World War I and the corporation went public for the first time in 1929 with a listing on the Midwest Stock Exchange, and in 1949 was listed on the New York Stock Exchange.[13]

Despite being ranked eighth among the country's top coal producers in the mid-1950s, Peabody began to lose market share to companies operating cost-efficient surface mining operations.[11] To address the situation, it entered into merger talks with Sinclair Coal Company. A merger between the two companies occurred in 1955, resulting in the transfer of Peabody's headquarters to St. Louis, Missouri. The merged company retained the Peabody name.[13] Under the leadership of chairman Russell Kelce, the company expanded production and sales.[11]

1960–2000

In 1962, Peabody expanded into the Pacific with the opening of mining operations in Queensland, Australia.[11] During this period Peabody also forged an equity partnership with the Japanese trading company Mitsui & Co, and the Australian construction company Thiess.[14] In 1968, the company was purchased by the Kennecott Copper Corporation. However, the Federal Trade Commission challenged the purchase as an antitrust violation. In 1976, the FTC ordered Kennecott to divest itself of Peabody. The newly created Peabody Holding Company purchased the Peabody Coal business of Kennecott for $1.1 billion, and a consortium of companies controlled Peabody-Holding.[13]

Because of a federal contract with the Tennessee Valley Authority, the company was among 153 named in 1978 discrimination complaint with the Department of Labor Office of Federal Contract Compliance Program. The complaint, filed by the Coal Employment Project, a women's advocacy organization, was based upon Executive Order 11246 signed in 1965 by U.S. President Lyndon Johnson, which bars sex discrimination by companies with federal contracts.

2001–2009

In 1996, Hanson demerged Peabody and Eastern Group under the name The Energy Group. When TXU acquired The Energy Group, Peabody was sold to Lehman Brothers Merchant Banking Partners. The company filed an initial public offering (IPO) in May 2001, and since this time it has operated as a publicly traded company.[11] In 2002, Peabody launched its Peabody Energy Australia Coal Co. following the acquisition of the Wilkie Creek Mine in Queensland's Surat Basin.[21] The North Goonyella coal mine was acquired by Peabody in 2004.[22] In October 2006, Peabody completed an acquisition of Excel Coal Limited, an independent coal company in Australia. Peabody paid $1.52 billion for Excel and also assumed $227 million of Excel's debt. At the time, Excel owned three operating mines and three development-stage mines in Australia. Additionally, Excel had an estimated 500 million tons of proven and probable coal reserves.[23]

2010–2011: Peabody predicts long-term supercycle in coal prices

At the 2010 World Energy Congress, Peabody CEO Gregory Boyce proposed a plan that advocated for the expanded use of coal worldwide, placing emphasis on geographic areas with limited or no access to electricity.[29]

In 2010, former CEO Gregory Boyce told investors that global demand for coal was entering a multi-year growth period, stating "We're in the early stages of a 30-year supercycle in global coal markets."[30]

In 2011 the company reiterated that "the coal supercycle is just getting underway."[31][32]

2012–2025: Net losses, bankruptcy and return to profitability

Peabody reported net losses in excess of $500 million annually for each calendar year during 2012 through 2015, including a loss of nearly $2 billion for 2015.[33][34]

The company filed for Chapter 11 bankruptcy in April 2016 after reporting a loss of $165 million for the first quarter.[35][36] It emerged from bankruptcy in April 2017 and started trading on the NYSE with a ticker symbol of BTU.[9]

In October 2017, a judge ruled that Peabody Energy's bankruptcy protected it from "global-warming lawsuits brought by California coastal communities [in July 2017] against fossil-fuel companies."[37]

Environmental record

Mining coal for energy production has been the subject of controversy for a long time. The Sierra Club has expressed concern regarding Peabody Energy's initial opposition to the Clean Air Act and other environmental regulations, as well as its support for the expanded use of coal-generated electricity as a means of meeting increasing worldwide demand for energy.[57] The Natural Resources Defense Council has been critical of Peabody's advocacy for expanding coal generated electricity in the U.S., specifically on account of the environmental impacts of surface mining operations.[58] The environmental impact of Peabody's surface mining operations in Muhlenberg County, Kentucky was the subject of criticism in John Prine's 1971 song "Paradise."[59][60] In Newsweek's 2011 rankings of the least eco-friendly companies in the US, Peabody Energy was ranked #9 out of the top 500 largest US companies based on their environmental impact.[61]

Peabody launched its first land reclamation program, Operation Green Earth, in 1954.[62] Since then, Peabody's activities in pursuit of its mission, specifically concerning environmental sustainability practices, have been recognized by regulators and industry groups, but have raised concerns among its critics, primarily environmental advocacy organizations. The company has taken steps to enact environmental restoration and has been recognized by the United States Department of the Interior for their reclamation efforts.[63][64]

In response to federal legislation, such as the 1970 Clean Air Act and the 1990 Clean Air Act amendments, and environmental criticism of its mining operations, Peabody has directed investments in technologies and equipment that serve to mitigate adverse environmental effects of their coal mining operations.[65] In 2007, the company became the only non-Chinese equity partner in the 650-megawatt near-zero emissions GreenGen clean-coal project in Tianjin, China.[66] Peabody has also invested in the development of carbon capture technologies and coal-to-gas and coal-to-hydrogen projects.[67][68]

In 2014, Peabody Energy's CEO told a coal industry conference that coal-fired electricity generation would bring public health benefits in developing nations, specifically improving cold-chain refrigeration of a potential future Ebola vaccine. Peabody's claim was criticized by three public health academics as "an insult", and an "opportunistic attempt and somewhat desperate to relate corporate self-interest to a massive public health crisis".[69]

In Newsweek's 2012 Green Rankings—comparisons of the environmental footprint, management, and transparency of the largest public companies in America—Peabody Energy was ranked 493rd out of 500 in all industries and 29th out of 31 in the energy industry. The company received the worst possible Environmental Impact score.[70]

Peabody Energy often used "self-bonding" to guarantee it could pay for its mine reclamation obligations under the Surface Mining Control and Reclamation Act of 1977.[71] On March 28, 2016, the Wyoming Department of Environmental Quality assured the federal Office of Surface Mining that Peabody Energy's self-bonding remained adequate.[72] Before Peabody Energy declared bankruptcy it held $1.47 billion in self-bonding liabilities, including $900.5 million in Wyoming alone.[73] In 2016, Peabody reached settlement agreements with Illinois, Wyoming, New Mexico, and Indiana related to its self-bonding obligations.[74]

Peabody Energy

History

Early years (1883–1959)

1960–2000

2001–2009

2010–2011: Peabody predicts long-term supercycle in coal prices

2012–2025: Net losses, bankruptcy and return to profitability

Financial results

Lines of business

Black Mesa controversy

Misleading investors about climate change

Environmental record

Marketing, public relations, and lobbying

American Legislative Exchange Council

Advanced Energy for Life

Climate change denial

External links

References