As Peabody Profits Slump Coal Miner Turns To China

JIM SUHR

ST. LOUIS (AP) — Peabody Energy Corp. said Tuesday its third-quarter profits plunged 71 percent as cooler weather and cheap natural gas curtailed coal-fired power generation. But the performance soundly topped expectations and the company offered a rosier production outlook.

That outlook isn't being driven by a better economic climate in the U.S. Peabody is moving quickly to pull more coal from its Australian mines to satisfy a couple of customers still buying a lot of coal: China and India.

China imported 21 million tons of metallurgical coal used for steelmaking through August — according to Peabody, 10 times last year's pace. India reports it may be up to 200 million tons short of coal per year by 2014

Rising steel production in both countries has stoked an appetite for coal, said Gregory Boyce, Peabody's chairman and chief executive.

For Peabody and other miners, Australia is key to tapping the Chinese market. A year after sending 1.1 million tons of coal to China, that figure has reached 14.5 million tons.