Gregory Boyce, the chairman and CEO of Peabody Energy, recently discussed the company’s 2012 results at the company's annual shareholders. The company shipped nearly 140 million short t of coal from the Powder River Basin in 2012 to 90 power plants in 23 US states, as well as customers in Asia, Europe and South America.
"In addition to completing the safest year in Peabody history, we achieved record revenues, record US adjusted EBITDA and record Australia volumes," Boyce said. "Our team continues to navigate changing markets, deliver safe low-cost operational performance and pursue cost containment initiatives and capital discipline."
Safety remains the core measure of performance
Safety remains the company's core measure of performance, and Peabody delivered the best global safety results in its history in 2012, with an incidence rate of 1.82 per 200,000 work hours. This performance is 66% better than the industry average and reflects improvement in every region. Peabody built on this progress in Q1 2013, achieving a 30% safety improvement when compared to the same period last year.
Additional highlights from 2012 include:
- In Australia, a record 33 million short t sold and the integration of a major acquisition.
- More than 35 major honors for safety, corporate and environmental excellence and social responsibility in 2012. Among these accolades are the Global Energy Commodity Excellence Award for industry-leading performance and Mining Magazine's recognition of the North Antelope Rochelle Mine (NARM) as Mine of the Year, noting NARM's role as the world's largest and most productive surface operation; and
- Two Excellence in Surface Coal Mining Reclamation Awards, among the highest environmental honors presented by the U.S. Department of the Interior.
Boyce expanded upon remarks made at meeting, noting that Peabody's reserve position, diversified global platform, access to infrastructure and future pipeline of projects all position the company for volume and margin improvement as markets strengthen. He said the company expects long-term energy needs to grow amid unprecedented urbanisation in Asia.
2013 outlook positive
"Our outlook for 2013 is positive," Boyce concluded. "We expect US coal demand to grow by 60 to 80 million short t over 2012 levels. Chinese and Indian coal imports are rising, Chinese steel production is growing, and new coal generation is being developed around the globe. We benefit from an outstanding thermal and metallurgical coal portfolio, and our diversity of supply and depth of market intelligence allow us to manage well through all markets."
Looking ahead, the company has four focus areas in 2013:
- Operational excellence in safety and productivity.
- Tight cost management, driven by an active cost containment task force.
- A focus on improving capital efficiency as a means to maximize cash flows to continue to reduce debt.
- Ongoing initiatives to position our global platform to benefit during the expected market recovery.
Peabody also is committed to continuing its leadership in sustainable mining and clean coal solutions, Boyce said. The company participates in multiple advanced clean coal technology projects and partnerships toward an ultimate goal of near-zero emissions from coal use. Boyce noted that by mid-century, five out of every 10 people are likely to still lack adequate access to energy if global population and energy demand growth continue at the projected pace."Economic turmoil, resource scarcity and rising energy costs in recent years remind us of the essential role that reliable, affordable, accessible energy from coal plays in human health and welfare," said Boyce. He noted that coal is the only fuel with the large scale and low cost to address enormous global energy needs and access to energy is linked with greater longevity, literacy and a better standard of living. "We believe energy poverty is the greatest crisis the world confronts and increasing access to all forms of affordable energy – including coal – is the only response."
Adapted from press release by Jonathan Rowland.
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