Peabody Energy looks to expand southern Illinois coal mine by 40 percent

Peabody looks to expand southern Ill. coal mine

ST. LOUIS — Peabody Energy Corp. said Monday it expects to spend $175 million to expand one of its southern Illinois coal mines by 40 percent, extending by 16 years the life of a site that environmental critics believe has no business getting bigger.

The St. Louis-based company, the world’s biggest private-sector coal producer, said the move within years could boost annual output of the Gateway Mine near Coulterville — in Randolph County, about 50 miles southeast of St. Louis — to 4.5 million tons. The underground mine last year accounted for 3.2 million tons of coal, much of it for various Midwest utilities and industrial customers.

The expansion, pending permitting and regulatory approval, intends to tap 280 million tons of coal reserves that Peabody estimates are at the site.

“We are expanding Gateway to serve one of the fastest-growing markets in the United States,” said Gregory Boyce, chairman and chief executive at Peabody, which fuels roughly one-tenth of all U.S. electricity generation and more than 2 percent worldwide.

The Sierra Club’s Illinois chapter worries that broadening Gateway could fan pollution of the area’s water and air. But the group’s Joyce Blumenshine said challenging Peabody’s push beyond just a public hearing could be a David-vs.-Goliath scenario the cost-conscious agency may not be able to afford.

“At this point, our options are under consideration,” said Blumenshine, the Illinois chapter’s chairwoman on mining issues. Beyond making public objections, trying to block such expansion “involves lawyers and fees, and the resources required are huge and fall upon the public. The scales are unfairly tipped in any situation in favor of huge international companies such as Peabody.”

“If they keep expanding all the mines they own in southern Illinois, if and when they subside, we will have our very own great lake,” added Kathy Andria, another Illinois Sierra Club member. “Instead of Lake Michigan, we will have Lake Illinois — only it will be filled with arsenic and other toxic heavy metals.”

The expansion coincides with Peabody’s effort to grow its operations elsewhere, including in Australia where the company says it’ll beef up output at six mines that are home to sizable reserves of metallurgical coal used in making steel — a variety in hot demand by China and other Asian countries.

Peabody said it also plans to stoke operations at its Bear Run Mine in Indiana and its El Segundo site in New Mexico — the first new coal mine developed in that state in two decades.

Peabody has forecast sales this year of 240 million to 260 million tons, including U.S. production of 185 million to 195 million tons and Australia production of 27 million to 29 million tons.

The plan to extend Gateway by advancing the underground operation north of the existing site was welcomed news in Randolph County, home to a state prison and Gilster-Mary Lee Corp. plants that make baking mix, shredded wheat, and macaroni-and-cheese and pasta meals.

With its unemployment pushing 9 percent, the county has grown to rely on the mining jobs locals credit as offering good pay and benefits.

“To us, that (Gateway expansion) is great news,” said Ken Slavens, chairman of the county’s board of commissioners. “It just drives me crazy that we’re hauling coal in from Wyoming when you’ve got it right here. We’re sitting right on top of it.”