Yesterday, I attended a climate control conference with Dar Williams and Andrew Revkin, science writer NYtimes and sometime musician. They sang John Prine's Paradise and realized that the chorus included a very appropriate reference to Peabody Coal Company.
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The environmental impact of Peabody Energy's strip mining operations in Muhlenberg County, Kentucky is the subject of John Prine's 1971 song "Paradise." The company was forever immortalized in the song, popular on the bluegrass circuit, whose refrain goes thusly: And daddy won't you take me back to Muhlenberg County Down by the Green River where paradise lay? Well, I'm sorry my son, but you're too late in asking... Mister Peabody's coal train has hauled it away.
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Peabody Energy (NYSE: BTU), previously Peabody Coal Company, is the largest private-sector coal company in the world. In 2006, Peabody sold over 247 million tons of coal. The company's coal fuels approximately 10% of the electricity generated in the United States and 3% of electricity generated throughout the world. The company has operations in Colorado, Illinois, Indiana, Kentucky, West Virginia, Arizona, Wyoming, New Mexico, Australia, and South America. Its largest operation is the North Antelope-Rochelle Mine located in Campbell County, Wyoming, mining more than 87 million tons of coal annually.
Peabody sells coal to over 350 electricity generating and industrial plants in 15 countries. As of December 31, 2006, the company had 10.2 billion tons of proven and probable coal reserves. It holds majority interests in 40 coal operations located throughout the United States and in Australia and Venezuela. In addition, Peabody owns minority interests in two mines through joint venture arrangements. Most of the production in the western United States is low-sulfur coal from the Powder River Basin. In the West, it owns and operates mines in Arizona, Colorado, New Mexico and Wyoming. In the East, it owns and operates mines in Illinois, Indiana, Kentucky and West Virginia.
Peabody was Nos. 497 and 453 on the Fortune 500 list of companies in 2005 and 2006, respectively.
Contents
[hide]
* 1 History
* 2 Recent Developments
* 3 Reference in Song
* 4 See also
* 5 References
[edit] History
The origins of Peabody Energy starts with the founding of Peabody, Daniels & Company by Francis Peabody and a partner.[2] The company bought coal from established mines and sold it to homes and businesses in the Chicago area. Francis soon bought out his partner, and, in 1890, he incorporated the company as Peabody Coal Company. In 1895, the company began operating its first mine, in Williamson County, Illinois. In 1913, the company won its first long-term contract to supply a large electric utility. Such contracts to electric utilities is how Peabody makes most of its money today. The corporation went public in 1929 with a listing on the Midwest Stock Exchange, and, in 1949, was listed on the New York Stock Exchange.
While Peabody was profitable during its early years, it hit hard times in the early 1950s. To address the situation, it entered into merger talks with Sinclair Coal company. The merger occurred in 1955, resulting in the move of Peabody's headquarters to St. Louis. The merged company, however, retained the Peabody name. Under the leadership of coal-veteran Russell Kelce, the company expanded production and sales, and purchased a mine in Queensland, Australia, its first outside of North America.
In 1968, the company was purchased by the Kennecott Copper Corporation. The U.S. Federal Trade Commission, however, challenged the purchase as an antitrust violation. In 1976, the FTC ordered Kennecott to divest itself of Peabody. The newly-created Peabody Holding Company purchased the Peabody Coal business of Kennecott for $1.1 billion. A consortium of companies controlled Peabody-Holding. In 1990, Hanson PLC, one of the owners of Peabody Holding, bought out the rest of the owners. Peabody was eventually bought by a unit of Lehman Brothers, which brought the company public as Peabody Energy Corporation in 2001. The IPO for Peabody Energy raised proceeds of $456 million.
[edit] Recent Developments
In October 2006, Peabody completed an acquisition of Excel Coal Limited, an independent coal company in Australia. Peabody paid $1.52 billion for Excel and also assumed $227 million of Excel's debt. At the time, Excel owned three operating mines and three-development stage mines in Australia. Additionally, Excel had an estimated 500 million tons of proven and probable coal reserves.[3] Peabody owns five other mines in Australia, which are all located in Queensland. Most of the Australian production is low-sulfur, metallurgical coal.
On August 30, 2007, Ernie Fletcher, the governor of the U.S. state of Kentucky signed into state law a bill that will provide approximately $300 million in incentives to Peabody to build a coal gasification plant in that state.[4] The incentives comes in the form of breaks on sales taxes, incentive taxes and coal severance taxes.[4]
[edit] Reference in Song
[edit] See also
Black Mesa Peabody Coal debate
