Peabody - Arizona Operations
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  • Thank you (Gerard) and good morning. It is a pleasure to be here, to share my view of the fundamentals for the coal industry. I will make many observations and one overriding point: We may well be in the early stages of a 30-year supercycle for the global coal markets. Coal fuels electricity for basic needs. It provides the steel that is the foundation for strong societies. And it is the only sustainable fuel that can provide low-carbon energy at scale. Coal’s vast reach is particularly crucial when you consider the other side of our ultimate value chain… 3.6 billion people around the world lack adequate access to electricity right now. Another 2 billion will require electricity in the next 20 years based on population forecasts. So in as little as 20 years, the world will need additional electricity for the approximate equivalent of our today’s global population. Add the pronounced effects of dramatic steel production to accommodate billions of people entering middle class status… and you have unshakeable demand for coal that will continue for many, many years. The world has trillions of tons of coal available around the world… and we will use them all.
  • Let’s go back to Black Mesa… so named for the pinyon and juniper woodlands that give the mesa a dark appearance. As you can see, this area is steeped in tradition. Many families still make their livelihood in a traditional way… running cattle and sheep. Years ago, all the locals used to go to Grandma Etcitty, the woman you see holding the baby lamb… for help breaking wild horses. Laura still gets up before dawn every morning to tend her flock... on reclaimed lands. The Black Mesa is a special place, and Peabody has operated there in partnership with the Navajo and Hopi for nearly 40 years, creating hundreds of jobs and tens of millions of dollars in annual tribal revenues. Our team has developed a first-of-its-kind program to restore plants and herbs for ceremonial and medicinal needs, and reclaimed lands are up to 20 times more productive for grazing than native range. These collective efforts were recently honored as a global example for sustainability, through the Energy Globe Awards in Brussels. We were recognized among hundreds of projects from around the world.
  • Thank you (Gerard) and good morning. It is a pleasure to be here, to share my view of the fundamentals for the coal industry. I will make many observations and one overriding point: We may well be in the early stages of a 30-year supercycle for the global coal markets. Coal fuels electricity for basic needs. It provides the steel that is the foundation for strong societies. And it is the only sustainable fuel that can provide low-carbon energy at scale. Coal’s vast reach is particularly crucial when you consider the other side of our ultimate value chain… 3.6 billion people around the world lack adequate access to electricity right now. Another 2 billion will require electricity in the next 20 years based on population forecasts. So in as little as 20 years, the world will need additional electricity for the approximate equivalent of our today’s global population. Add the pronounced effects of dramatic steel production to accommodate billions of people entering middle class status… and you have unshakeable demand for coal that will continue for many, many years. The world has trillions of tons of coal available around the world… and we will use them all.

Peabody - Arizona Operations Presentation Transcript

  • 1. Arizona Operations Overview February 4 , 2011
  • 2. Peabody Uses Sustainable Mining Practices
    • 40-year business partnership with the Navajo Nation and Hopi Tribe
    • Tribes own the land and coal resources and provide an able workforce
    • Peabody has the mining expertise and capital to operate safely and productively
    • Peabody is a premier employer, creating hundreds of skilled jobs
    • Lands are reclaimed for traditional practice of livestock grazing and cultural plant collection
    • Mining has created more than $3 billion in direct economic benefits since operations began for a $12 billion direct and indirect benefit
    • Peabody’s model recognized among world’s best at the Energy Globe Awards in Brussels in 2007
    Black Mesa Recognized as World Model
  • 3. Mining Has Injected More Than $3.1 Billion into Tribal Economies
  • 4. Additional Local Benefits
    • Area resident land use payments average $487,000 per year
    • Grazing management program and education ongoing
    • Road maintenance and improvements continuing
    • Water supply assistance to residents and their livestock
    • Public coal free to area residents for home heating
    • Annual health fare free to area residents
    • Emergency assistance with roads, coal and water
    • Summer student jobs program for local area chapters
  • 5.
    • Kayenta Mine serves Navajo Station through 35-year coal supply contract
    • Nearly 8 million tons of coal shipped annually
    • More than 94 percent of the workforce is Native American
    • Workers earn wages that are 10 times higher than tribal per capita income
    • Every mining job is estimated to create three additional local jobs
    Peabody is a Premier Employer Creating Sought-After Jobs
  • 6. Reserves Located on Hopi & Navajo Lands
    • Navajo Lease Boundary
    • 100% Navajo Nation mineral ownership and 12.5% royalty
    • 200 million tons originally leased
    • 90 million additional tons leased in 1987
    • 196 million tons mined as of January 1, 2011
    • 94 million tons remain to be mined as of January 1, 2011
    • Joint Use Area Leases Navajo & Hopi
    • 50% Navajo Nation and 50% Hopi Tribe mineral ownership
    • 200 million tons originally leased
    • 180 million additional tons leased in 1987
    • 226 million tons mined as of January 1, 2011
    • 154 million tons remain to be mined
  • 7. Black Mesa Complex Lease Area
  • 8. Reclamation Preserves Traditional Cultural Practices Lands Restored for Cultural Plant Use, Grazing & Wildlife
  • 9. Restored Lands are Important to Residents
    • Collaboration with area residents promotes good range management
    • Residents have access to productive reclaimed range under Peabody control
    • Program provides framework for long-term sustainability of range
    • Lands are typically 20 times more productive for grazing than native areas
  • 10. One-of-a-Kind Cultural Plant Program
    • Program encompasses unique and specific best practices developed by PWCC
      • Consulted Navajo and Hopi medicine men, herbalists, practitioners and literature – 120 species identified
      • Native cultural plant seed collections from Black Mesa
      • Specific propagation, greenhouse, and nursery programs
      • Restore critical soil microbial/plant relationships
      • Planting sites developed similar to native site characteristics
    • Nearly 70 cultural plant sites established to date using 40 cultural plant species
    • The program is unique in U.S. surface coal mining
  • 11. Navajo Aquifer Spans an Area the Size of Delaware
  • 12. Navajo Aquifer Holds 400 Million Acre-Feet of Water
    • Navajo Aquifer spans 7,500 square-mile area across northern Arizona; comprised of porous sandstone saturated with water from last Ice Age
    • Navajo Aquifer holds more than 400 million acre-feet of water, 17 times the size of Lake Powell
    • Mine uses about 1200 acre-feet of water annually for mining and potable uses; 30% of the water used when both mines operated
    • Lease conditions give Peabody the right to purchase Navajo Aquifer water as long as mining continues
    • Water purchased at a rate that is 10 times the industrial water rate for the Central Arizona Project
  • 13. Navajo Aquifer is an Important Tribal Water Resource
    • Navajo Aquifer supplies about 3,000 acre-feet of water for communities & 1,200 acre-feet of water for mining & potable water
    • Aquifer is replenished through the hydrologic cycle
    • Annual Navajo Aquifer recharge estimated at 13,000 to 16,000 acre-feet by U.S. Office of Surface Mining
    Major Navajo Aquifer Recharge Area Tsegi Canyon, Arizona
  • 14. N aquifer Water Level Recovery - Kayenta Mine Wellfield Navajo Well Water Level (feet below ground surface) Time Period Navajo Well 3OBS Navajo Well 6OBS 2005 Mean Static Level 1155.0 1344.0 End of 2006 1059.2 1262.6 End of 2007 1017.3 1206.1 End of 2008 992.1 1184.6 End of 2009 981.4 1191.3 End of 2010 964.6 1180.0 Total Recovery 190.4 171.0
  • 15.
    • Operations require more than 20 permits and licenses mandated by 32 federal statutes
    • State-of-the-art monitoring & reporting system used
    • Performance measured through monitoring, independent study of environmental data & weekly inspections
    • Excellent compliance maintained
    Excellent Environmental Compliance Record Maintained
  • 16. Multiple Initiatives Improve Quality of Life on Black Mesa
    • Assist Navajo Nation in establishing improved water and power distribution system in lease area
    • Provide free potable water and free coal for home heating to local residents
    • Maintain roads and infrastructure for local families
  • 17. Mining Supports Excellence in Education at Tribal Schools
    • Peabody contributes $365,000 annually in Navajo and Hopi scholarships
    • Peabody helped develop infrastructure to “wire” town of Forest Lake; award-winning program recognized nationally
    • Virtual classroom contains work stations with video conferencing & Internet access to high school
  • 18. 19-Year Black Mesa Archaeology Project meets Federal and Tribal Requirements
    • Led by Southern Illinois University’s Center for Archaeological Investigations (SIU-CAI)
    • 700 scholars and scientists surveyed 101 sq. miles and identified 2,710 sites
    • 215 sites excavated; 887 sites tested and mapped; more than 300 publications
    • Over 1 million artifacts remain the property of the Navajo and Hopi
    • SIU-CAI is curating the artifacts using best practices
  • 19. Good Compliance is Achieved with Respect for Traditional and Cultural Values
    • Cultural studies, TCP and NAGPRA investigations, and site mitigation are ongoing
    • Field work is conducted by professionals under the supervision of the Office of Surface Mining and tribal authorities
  • 20.
    • 2009 State Mine Inspector
    • Reclamation Award
    • 2007 Energy Globe Awards
    • International Honors
    • 2005 OSM National &
    • Silver Good Neighbor Awards
    • 2003 OSM Inaugural Good Neighbor Award
    • 2002 OSM Director’s Award
    • 1998 OSM National Award for Reclamation
    Consistently Recognized for Excellence in Land Restoration
  • 21. Arizona Operations Overview February 4 , 2011