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Peabody to Develop New Mexico Mine

Deal's with Arizona Public Service.

St Louis based coal producer

Peabody Energy

(BTU) - Get Peabody Energy Corporation Report

said it to develop the El Segundo Mine in northwest New Mexico to serve a 19-year, 65 million-ton coal supply agreement with Arizona Public Service.

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The project is expected to generate over $1 billion in revenue.

El Segundo, the first greenfield coal mine developed in New Mexico, is expected to begin coal production in 2008 and will have the capacity to produce 6 million tons of coal annually.

All major permits for the mine have been obtained from the state and development will begin during the fourth quarter of 2006. El Segundo is expected to be the most productive mine in the Southwest when it is in full production. Capital investments are expected to be approximately $90 million during the development phase.

This story was created through a joint venture between and IRIS.