Arshad Sayed, President of Mongolia & India Peabody Energy

1. February 20, 2014
Arshad Sayed
President – Mongolia & India
Peabody Energy
Global Coal Markets and Implications
for Mongolia
COAL MONGOLIA

2. Reported 2012 sales volumes in millions of tons. Reserves based on 2012 10-K filing in billions of tons.
* Total sales include sales sourced from third parties via Trading & Brokerage.
International Offices
St. Louis New Delhi
Brisbane Beijing
Newcastle Urumqi
London Singapore
Ulaanbaatar Jakarta
Essen Balikpapan
Essen
London
Beijing
Ulaanbaatar
Urumqi
St .Louis
Singapore
Jakarta
DTA
NCIG
Balikpapan
New Delhi
Peabody’s Global Platform Provides
Growth and Earnings Diversification
2
Mining Operations
Position Sales* Reserves
SPRB 1 141 3.6
Midwest 1 30 3.4
Southwest 1 17 1.0
Colorado 1 8 0.2
Australia 3 40 1.1
World’s Only Global Pure-Play Coal Investment

3. Overview of Peabody Energy
● The world’s largest private-sector
coal company
– 252 million tons sold in 2013
– $7 billion in revenues
● Customers on six continents
● 28 mines
– Surface/underground
– U.S. and Australia
● Listed on New York Stock
Exchange under the symbol “BTU”
● “Fortune 500” and “S&P 500”
ranking
3

4. Open-Cut Mining Expertise
● Peabody is the largest
producer of open-cut mined
coal in North America
– 89% of Peabody’s volumes
sold were from open-cut mines
– 141 million tons were produced from
Peabody’s three mines in the Southern
Powder River Basin
– 21 open-cut mines in operation globally
● Peabody optimizes production
using multiple mining methods
– Cast blasting
– Draglines with dozer assist
– Truck and shovel with dozer assist
● Surface operations typically recover 90% to 96% of seams mined
4

5. Key Discussion Themes
● Global demand for coal continues to grow
● Advanced coal generation key to achieving
energy, economic, environmental objectives
● Adopting the principles of 21st century coal will
ensure that Mongolia’s coal sector is globally
competitive
5

6. Demand for Coal Continues
to Grow

7. 0
1 500
3 000
4 500
6 000
7 500
9 000
2013E 2014P 2016P
ROW China India
Annual World Coal Use Expected to Grow
700 Million Tonnes Over Next Three Years
● Record global coal use
expected to continue on
growing electricity and
steel demand
● New coal-fueled
generation of ~250 GW
expected by 2016
● Coal increasingly
converted to gas in Asia
● China and India drive
nearly 80% of global
demand growth
Source: Peabody Global Analytics.
Expected Global Coal Demand
(Tonnes in Millions)
2,925
3,075
4,570
4,130
890
780
7,835
8,535
8,055
2,950
4,295
810
7

8. Metallurgical Coal Fundamentals
Projected to Improve in 2014
● Mongolia projected to play key role in global met coal export
picture, especially through growing Chinese import demand
● China becomes largest metallurgical coal importer; Rising costs,
declining domestic quality support additional imports
● Global met coal pricing constrained on higher seaborne
metallurgical supplies in 2013
● Demand growth expected to exceed supply increases in 2014
with slowdown of new projects and closure of high-cost mines
● Seaborne metallurgical coal demand expected to grow
10 – 15% through 2016
Rising Global Steel Demand from Industrialization and Urbanization
8
Source: Peabody Global Analytics.

9. China, India Account for 80% of
Projected Global Coal Demand Growth
● Record coal imports in 2013
– ~320 million tonnes in China
– ~170 million tonnes in India
● China and India coal
imports expected to grow
~100 million tonnes by 2016
● Significant new coal
generation driving demand
– ~110 GW in China
– ~45 GW in India
● China closing marginal cost
production
– Costs rising >10% per year
● New port projects underway
to enable greater imports
Source: Peabody Global Analytics, China Customs, India Market Watch.
China and India Coal Imports
(Tonnes in Millions)
0
100
200
300
400
India China
185
220
168
380
327
3452016P
2014P
2013E
9

10. Shenzhen is Case Study in Urbanization
Driving Demand
Circa 1980
From Sleepy Fishing Village to Mega City of 10+ Million People
10

11. 11
Technologies Key to
Energy, Economic,
Environmental Goals
GreenGen Power Plant and
Carbon Research Center; Tianjin, China

12. Millions of People Who Lack Adequate Electricity
Energy Access is a Human Right
and a Rapidly Rising Need
12
3.5 Billion People Lack Proper Access to Electricity
140
210
34865
988
436
Source: International Energy Agency World Energy Outlook 2012, The World Bank World Development Indicators 2012, CIA World Factbook 2012.
Millions of People Who Have No Electricity
589
29
13418
4961

13. Coal is Essential to Energy,
Economic, Environmental Goals
● Ensure at least half of new
generation from coal
● Replace older coal plants
with ultra-supercritical
plants
● Deploy coal-to-gas, coal-
to-chemicals, coal-to-
liquids
● Develop 100 CCS projects
in a decade
● Commercialize near-zero
emissions technology
13
Peabody Plan Advances Technology Solutions to Achieve 3Es
GreenGen Power Plant, Tianjin

14. 21st Century Coal: Creating
a Competitive Mongolian
Coal Sector
14

15. 21st Century Coal
15
● Introduced by the governments of China and the U.S. in
2009 to advance development of clean energy solutions
● Rests on a solid foundation of progress, advancement and
innovation across our industry in recent decades in areas
including safety, productivity, sustainability and near-zero
emissions technology
● Provides the solution for economic progress and energy
access for the nearly one in five people on the planet who
have no access to electricity
Symbol for the Future of Coal in the World

16. 16
21st Century Coal Approach: Peabody’s
World-Class Surface Mines
● Every employee commits to mission, safety vision
and sustainable practices
● Safe, efficient, large-scale mine operations start
with best practices in training
● Well capitalized operations and state-of-the-art
technology drive efficiency
● World-class environmental stewardship built into
company’s mission
● Sustainable practices show respect for cultures

17. Creating Conditions for a Competitive,
World-Class Coal Industry
17
● Role of the State
● Legal/policy framework
● Security of tenure
● Freedom to operate on a commercial basis
● Comprehensive environmental protection
● Competitive and stable fiscal terms
Six Building Blocks for Modern, World-Class Minerals Development
Source: The World Bank Group,

18. Developing Mongolia’s 21st Century Coal
Industry: Recommendations
18
Social Compact:
GoM, Investors,
Civil Society
Consolidate coal
industry regulatory
functions into single
oversight body
Mineral ownership
100% vested with
Government until
severed from land
Create Mongolian
Citizens Social Fund
with independent
oversight panel
Required training
programs to maximize
Mongolian workforce
over time
Establish
independent
Mongolian Mining
Tribunal
Pursue a phased
approach for
South Gobi
development
Safeguard highest
value of mineral
assets as global
tradable commodityAuthorize regional
Environmental Impact
Assessments to
provide consistency

19. February 20, 2014
Arshad Sayed
President – Mongolia & India
Peabody Energy
Global Coal Markets and Implications
for Mongolia
COAL MONGOLIA