What changed in this filing

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Item 1. Business

2021-02-23 compared with 2020-02-21 · 339 added, 330 removed, 560 unchanged (54% of the section changed)

We are the leading global pure-play coal company.

As of December 31, 2019 , we own interests in 21 coal mining operations located in the United States (U.S.) and Australia.

We had previously reported owning interests in 23 coal mining operations, but during the year ended December 31, 2019 , the Cottage Grove Mine in the Midwestern U.S.

Mining segment and the Kayenta Mine in the Western U.S.

Mining segment shipped their final tons.

As a result, we now have a majority interest in 20 mining operations and a 50% equity interest in Middlemount Coal Pty Ltd.

We are a leading coal producer.

At December 31, 2020, we owned interests in 17 active coal mining operations located in the United States (U.S.) and Australia.

Included in that count is our 50% equity interest in Middlemount Coal Pty Ltd.

(Middlemount), which owns the Middlemount Mine in Queensland, Australia.

We also announced the closures of the Millennium, Wildcat HiIls Underground and Somerville Central Mines, with all of those operations expecting to ship their final tons in 2020.

In the Midwestern U.S.

Mining segment, we are continuing to transition toward operating complexes as we shift our sourcing of contracts to more productive mines.

In 2019, we achieved a global safety incidence rate of 1.64 incidents per 200,000 hours worked, which was 43% better than the 2018 industry average incidence rate of 2.88 incidents per 200,000 hours worked per the Mine Safety and Health Administration (MSHA).

In addition to our mining operations, we market and broker coal from other coal producers, both as principal and agent, and trade coal and freight-related contracts through trading and business offices in the U.S., Australia, China and the United Kingdom.

Throughout the year ended December 31, 2020, we idled nine individual mines for periods ranging from one week to multiple months.

Included in the count was our Shoal Creek Mine in Alabama, which was idled in October 2020 to reset the cost structure of the mine amid weak pricing and demand, and our Metropolitan Mine in New South Wales, Australia, which was idled in late December 2020.

As more fully described within “Liquidity and Capital Resources” of Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” during the fourth quarter of 2020 and the first quarter of 2021, we entered into a series of interrelated agreements with our surety bond providers, the revolving lenders under our credit agreement and certain holders of our senior secured notes to extend a significant portion of our near-term debt maturities to December 2024 and to stabilize collateral requirements for our existing surety bond portfolio.

In December 2019, after receiving the requisite regulatory and permitting approvals, we formed an unincorporated joint venture with Glencore plc (Glencore), in which we hold a 50% interest, to combine the existing operations of our Wambo Open-Cut Mine in Australia with the adjacent coal reserves of Glencore’s United Mine.

We will proportionally consolidate the entity based upon our economic interest.

Glencore will manage the mining operations of the joint venture (United Wambo Joint Venture).

On June 18, 2019, we entered into a definitive implementation agreement (the Implementation Agreement) with Arch, to establish a joint venture that will combine the respective Powder River Basin (PRB) and Colorado operations of Peabody and Arch.

We expect the joint venture to result in several operational synergies, including improved mining productivity and lower per-unit operating costs.

Pursuant to the terms of the Implementation Agreement, we will hold a 66.5% economic interest in the joint venture and Arch will hold a 33.5% economic interest.

We expect to proportionally consolidate the entity based upon our economic interest.

Governance of the joint venture will be overseen by the joint venture’s board of managers, which will be comprised of Peabody and Arch representatives with voting powers proportionate with the companies’ economic interests, with the exception of certain specified matters which will require supermajority approval.

We will manage the operations of the joint venture, subject to the supervision of the joint venture’s board of managers.

Formation of the joint venture is subject to customary closing conditions, including the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of certain other required regulatory approvals and the absence of injunctions or other legal restraints preventing the formation of the joint venture.

The proposed joint venture is progressing through the U.S.

Federal Trade Commission regulatory review process and we expect a decision in the first quarter, which would result in clearance to form the joint venture or litigation to block its execution.

In September 2019, we amended our credit agreement to expressly permit formation of the joint venture and we are exploring various alternatives under the indenture governing our senior secured notes.

At such time as control over the existing operations is exchanged, we will account for our interest in the combined operations at fair value.

Our current focus is on successfully integrating the United Wambo Joint Venture;

progressing the PRB Colorado joint venture with Arch;

evaluating commercial alternatives or mine development at our North Goonyella Mine;

advancing mine life extension projects in seaborne segments;

and maintaining financial strength.

Peabody Energy Corporation

2019 Form 10-K

Both parties contributed mining tenements upon formation of the joint venture (United Wambo Joint Venture), and the combined operations commenced in December 2020.

As per the joint venture agreement, we fully owned and operated the Wambo Open-Cut Mine through the date combined operations commenced.

At that date, the parties contributed mining equipment and other assets, and certain additional construction and development activities are ongoing.

We proportionally consolidate the entity based upon our economic interest.

On April 13, 2016, Peabody and a majority of its wholly owned domestic subsidiaries, as well as one international subsidiary in Gibraltar (collectively with Peabody, the Debtors), filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the U.S.

Code in the U.S.

Bankruptcy Court for the Eastern District of Missouri (the Bankruptcy Court).

The Debtors’ Chapter 11 cases (collectively, the Chapter 11 Cases) were jointly administered under the caption In re Peabody Energy Corporation, et al.

16-42529 (Bankr.

On March 17, 2017, the Bankruptcy Court entered an order, Docket No.

2763, confirming the Debtors’ Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession (as further modified, the Plan).

On April 3, 2017, (the Effective Date), the Debtors satisfied the conditions to effectiveness set forth in the Plan, the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases.

Segment and Geographic Information

As of December 31, 2020, we report our results of operations primarily through the following reportable segments:

Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Midwestern U.S.

Mining, Western U.S.

Mining and Corporate and Other.

Refer to Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding our segments.

“Segment and Geographic Information” to the accompanying consolidated financial statements is incorporated herein by reference and also contains segment and geographic financial information, including details of our plan to update our reportable segments beginning in the first quarter of 2020 to combine the Midwestern U.S.

Mining segment with the Western U.S.

Mining segment, which reflects the manner in which the chief operating decision maker (CODM) views our businesses going forward for purposes of reviewing performance, allocating resources and assessing future prospects and strategic execution.

Beginning the first quarter of 2020, we will report our results of operations primarily through the following reportable segments:

Seaborne Thermal Mining, Seaborne Metallurgical Mining, Powder River Basin Mining, Other U.S.

Thermal Mining and Corporate and Other.

Refer to Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding our segments.

“Segment and Geographic Information” to the accompanying consolidated financial statements is incorporated herein by reference and also contains segment and geographic financial information.

Mining Locations

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Louis, Missouri.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

Australian Locations

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

The table below summarizes information regarding the operating characteristics of each of our mines that were active in 2020 in the U.S.

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The mines are listed within their respective mining segment in descending order, as determined by tons sold in 2020.

Segment/Mining Complex

2019 Tons Sold

Segment/Mining Complex Location Mine

Method 2020 Tons Sold

(In millions)

Seaborne Thermal Mining

New South Wales

Wilpinjong New South Wales S D, T/S T R, EV 13.8

Wambo Open-Cut (1)

New South Wales

New South Wales S T/S T R, EV 4.0

Wambo Underground (2)

New South Wales

New South Wales U LW T, C R, EV 1.2

Seaborne Metallurgical Mining

Coppabella (3)

New South Wales

Queensland S DL, D, T/S P R, EV 2.0

Metropolitan (4)

New South Wales U LW C, P, T R, EV 1.4

Queensland S D, T/S C, P, T R, EV 1.0

Shoal Creek (4)

Alabama U LW C B, EV 0.9

Millennium (5)

North Goonyella (4)

Queensland S HW C, P R, EV 0.3

Middlemount (6)

Queensland S D, T/S C, P R, EV —

Powder River Basin Mining

North Antelope Rochelle

Third party (6)

Midwestern U.S.

Gateway North

Tr, R, R/B, T/B

Francisco Underground

Wildcat Hills Underground (7)

North Antelope Rochelle Wyoming S D, DL, T/S T R 66.1

Caballo Wyoming S D, T/S T R 11.6

Rawhide Wyoming S D, T/S T R 9.5

Thermal Mining

Bear Run Indiana S DL, D, T/S T Tr, R 5.7

El Segundo/Lee Ranch New Mexico S D, DL, T/S T R 4.6

Wild Boar Indiana S D, T/S, HW T Tr, R, R/B, T/B 2.0

Gateway North Illinois U CM T Tr, R, R/B, T/B 1.9

Francisco Underground Indiana U CM T R 1.8

Twentymile Colorado U LW T R, Tr 1.6

Somerville Central (7)

R, R/B, T/B, T/R

Cottage Grove (8)

El Segundo/Lee Ranch

Underground Mine

Highwall Miner

Rail to Barge

Truck to Barge

Dozer/Casting

Truck to Rail

Truck and Shovel

Export Vessel

Thermal/Steam

Continuous Miner

Pulverized Coal Injection

Majority-owned mines in which there is an outside non-controlling ownership interest.

Indiana S DL, D, T/S T R, R/B, T/B, T/R 0.5

Wildcat Hills Underground (8)

Illinois U CM T T/B 0.2

S Surface Mine B Barge

U Underground Mine Tr Truck

HW Highwall Miner R/B Rail to Barge

DL Dragline T/B Truck to Barge

D Dozer/Casting T/R Truck to Rail

T/S Truck and Shovel EV Export Vessel

LW Longwall T Thermal/Steam

CM Continuous Miner C Coking

R Rail P Pulverized Coal Injection

(1) In December 2020, the United Wambo Joint Venture began joint production.

The tons shown reflect our proportionate share throughout the year.

The Company’s 50% joint venture interest is subject to an outside non-controlling ownership interest.

(2) Majority-owned mine in which there is an outside non-controlling ownership interest.

(3) We own a 73.3% undivided interest in an unincorporated joint venture that owns the Coppabella and Moorvale mines.

The tons shown reflect our share.

It has been announced that the mine will close in 2020.

Our North Goonyella Mine experienced a fire during September 2018.

The tons shown reflect the remaining inventory that was sold during 2019.

(4) Mine was idled during the fourth quarter of 2020.

(5) Mine ceased production in March 2020, with sales continuing throughout May 2020.

(6) We own a 50% equity interest in Middlemount, which owns the Middlemount Mine.

Because that entity is accounted for as an unconsolidated equity affiliate, 2020 tons sold from that mine, which totaled 3.2 million tons (on a 100% basis), have been excluded from the table above.

Third-party purchased coal used to satisfy coal supply agreements.

Mine ceased production in December 2019.

The shipment of final tons is expected in 2020.

Mine was closed in July 2019.

Mine was closed in August 2019.

(7) Mine ceased production in December 2020, with sales continuing into January 2021.

(8) Mine ceased production in December 2019, with sales continuing throughout April 2020.

Refer to the “Summary of Coal Production and Sulfur Content of Assigned Reserves” table within Part I, Item 2.

“Properties,” which is incorporated by reference herein, for additional information regarding coal reserves, product characteristics and production volume associated with each mine.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

Coal Supply Agreements

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Those five customers were supplied primarily from 28 coal supply agreements (excluding trading and brokerage transactions) expiring at various times from 2021 to 2026.

The customer contributing the greatest amount of annual revenue in 2019 was approximately $ 477 million , or approximately 11% of our 2019 total revenues from coal supply agreements, and has contracts expiring at various times from 2021 to 2023.

Our largest customer in 2020 contributed revenue of approximately $264 million, or approximately 9% of our total revenues from coal supply agreements, and has contracts expiring at various times from 2021 to 2023.

Our sales backlog, which includes coal supply agreements subject to price reopener and/or extension provisions, was approximately 264 million and 327 million tons of coal as of January 1, 2021 and 2020, respectively.

Contracts in backlog have remaining terms ranging from one to seven years and represent approximately two years of production based on our 2019 production volume of 164.7 million tons.

Contracts in backlog have remaining terms ranging from one to six years and represent approximately two years of production based on our 2020 production volume of 128.8 million tons.

Approximately 62% of our backlog is expected to be filled beyond 2021.

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Thermal Mining Operations.

Revenues from our Powder River Basin Mining, Western U.S.

Mining and Midwestern U.S.

Mining segments, in aggregate, represented approximately 55% , 52% and 53% of our revenues from coal supply agreements for the years ended December 31, 2019 , 2018 and 2017 , respectively, during which periods the coal mining activities of those segments contributed respective aggregate amounts of approximately 83% , 84% and 84% of our sales volumes from mining operations.

Revenues from our Powder River Basin Mining and Other U.S.

Thermal Mining segments, in aggregate, represented approximately 58%, 55% and 52% of our revenues from coal supply agreements for the years ended December 31, 2020, 2019 and 2018, respectively, during which periods the coal mining activities of those segments contributed respective aggregate amounts of approximately 81%, 83% and 84% of our sales volumes from mining operations.

We expect to continue selling a significant portion of coal production from our U.S.

thermal mining segments under long-term supply agreements, and customers of those segments generally favor long-term sales agreements in recognition of the importance of reliability, service and predictable coal prices to their operations.

thermal mining segments under existing long-term supply agreements.

Certain customers utilize long-term sales agreements in recognition of the importance of reliability, service and predictable coal prices to their operations.

The terms of coal supply agreements result from competitive bidding and extensive negotiations with customers.

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Our approach is to selectively renew, or enter into new, long-term supply agreements when we can do so at prices and terms and conditions we believe are favorable.

However, recent trends indicate that customers may be less likely to enter into long-term supply agreements prospectively, driven by the reduced utilization of plants and plant retirements, sustained low natural gas pricing and the increased use of renewable energy sources.

Transportation

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Refer to the table in the foregoing “Mining Locations” section for a summary of transportation methods by mine.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

Export Facilities.

Our seaborne mining operations sold approximately 71% , 75% and 73% of its tons into the seaborne coal markets for the years ended December 31, 2019 , 2018 and 2017 , respectively.

We have generally secured our ability to transport coal in Australia through rail and port contracts and access to five east coast coa l export terminals that are primarily funded through take-or-pay arrangements (refer to the “Liquidity and Capital Resources” section in Part II, Item 7.

We have generally secured our ability to transport coal in Australia through rail and port contracts and access to five east coast coal export terminals that are primarily funded through take-or-pay arrangements (refer to the “Liquidity and Capital Resources” section in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information on our take-or-pay obligations).

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the primary port is the McDuffie Terminal in Mobile, Alabama, which we utilize without a take-or-pay arrangement.

thermal mining operations exported less than 1%, approximately 1% and approximately 1% of its annual tons sold for the years ended December 31, 2019 , 2018 and 2017 , respectively.

thermal mining operations exported less than 1% and approximately 1% of its annual tons sold during the years ended December 31, 2019 and 2018, respectively.

No tons were exported during the year ended December 31, 2020.

The primary ports used for U.S.

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We have many well-established, strategic relationships with our key suppliers of goods and do not believe that we are overly dependent on any of our individual suppliers.

In situations where we have elected to concentrate a large portion of our purchases with one supplier, it has been to take advantage of cost savings from larger volumes of purchases, benefit from long-term pricing for parts, ensure security of supply and/or allow for equipment fleet standardization.

Supplier concentration related to our mining equipment also allows us to benefit from fleet standardization, which in turn improves asset utilization by facilitating the development of common maintenance practices across our global platform, enhancing our flexibility to move equipment between mines and reduce working capital through inventory optimization.

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the demand for electricity and steel;

the cost of alternative fuels, including wind, solar, oil, hydro, nuclear, natural gas and biomass;

the cost of alternative sources;

the impact of weather on heating and cooling demand;

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and foreign governments.

Demand for our thermal coal products is impacted by economic conditions, demand for electricity, including the impact of energy efficient products, and the cost of electricity generation from coal and alternative forms of generation.

Demand for our thermal coal products is impacted by economic conditions;

demand for electricity, which is impacted by energy efficient products;

and the cost of electricity generation from coal and alternative forms of generation.

Our products compete with producers of other forms of electricity generation, including natural gas, oil, nuclear, hydro, wind, solar and biomass, that provide an alternative to coal use.

The use and price of thermal coal is heavily influenced by the availability and relative cost of alternative fuels and the generation of electricity utilizing alternative fuels, with customers focused on securing the lowest cost fuel supply in order to coordinate the most efficient utilization of generating resources in the economic dispatch of the power grid at the most competitive price.

The use and price of thermal coal is heavily influenced by the availability and relative cost of alternative fuel sources and the generation of electricity utilizing alternative fuels, with customers focused on securing the lowest cost fuel supply in order to coordinate the most efficient utilization of generating resources in the economic dispatch of the power grid at the most competitive price.

Regulatory policies and environmental, social and governance considerations can also have an impact on generation choices and coal consumption.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

In the U.S., natural gas is highly competitive (along with other alternative fuel sources) with thermal coal for electricity generation.

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The growth in domestic natural gas production and logistical constraints has led to discounts for regional gas prices versus the Henry Hub price, further driving lower natural gas price trends.

In addition, the competitiveness of other alternative fuel sources for electricity generation with coal has been strengthened by the growth of low-cost and government subsidized generation fueled by other alternative fuel sources.

In addition, the competitiveness of other alternative fuel sources for electricity generation has been strengthened by the growth of low-cost and government subsidized generation fueled by other alternative fuel sources.

These pressures, coupled with increasing regulatory burdens, have contributed to a significant number of coal plant retirements.

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coal power capacity was retired, and since 2010, U.S.

coal power capacity has fallen by more than a quarter.

coal power capacity has fallen by more than thirty percent.

Internationally, thermal coal also competes with alternative forms of electricity generation.

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In addition to our alternative fuel source competitors, our principal U.S.

direct coal supply competitors (listed alphabetically) are other large coal producers, including Alliance Resource Partners, Arch, CONSOL Energy, Eagle Specialty Materials LLC, Murray Energy Corporation and Navajo Transitional Energy Company LLC, among others.

Major international direct coal supply competitors (listed alphabetically) include Anglo American plc, BHP, China Shenhua Energy, Coal India Limited, Drummond Company, Glencore, PT Adaro Energy Tbk, SUEK, Whitehaven Coal Limited and Yancoal Australia Ltd, among others.

direct coal supply competitors (listed alphabetically) are other large coal producers, including Alliance Resource Partners, American Consolidated Natural Resources, Inc., Arch Resources, Inc., CONSOL Energy, Eagle Specialty Materials LLC, Foresight Energy, Hallador Energy, Kiewit, and Navajo Transitional Energy Company LLC, among others.

Major international direct coal supply competitors (listed alphabetically) include Adaro Energy, Anglo American plc, BHP, Bumi Resources, China Shenhua Energy, Coal India Limited, Drummond Company, Glencore, South32, SUEK, Whitehaven Coal Limited and Yancoal Australia Ltd, among others.

Metallurgical Coal

Demand for our metallurgical coal products is impacted by economic conditions, government policies, demand for steel and competing technologies used to make steel, some of which do not use coal as a manufacturing input.

Demand for our metallurgical coal products is impacted by economic conditions;

government policies;

demand for steel;

and competing technologies used to make steel, some of which do not use coal as a manufacturing input, such as electric arc furnaces.

We compete on the basis of coal quality and characteristics, delivered energy cost (including transportation costs), customer service and support and reliability of supply.

Seaborne metallurgical coal import demand can be significantly impacted by the availability of domestic coal production, particularly in leading metallurgical coal import countries such as China, among others, and the competitiveness of seaborne metallurgical coal supply, including from leading metallurgical coal exporting countries of Australia, the U.S., Russia, Canada, Mongolia and Mozambique, among others.

Major international direct competitors (listed alphabetically) include Anglo American, BHP, Glencore, Jellinbah, KRU, Shanxi Coking Coal Group, Teck Resources, Whitehaven Coal Limited and Yancoal Australia Ltd and , among others.

Seaborne metallurgical coal import demand can be significantly impacted by the availability of domestic coal production, particularly in leading metallurgical coal import countries such as China, among others, and the competitiveness of seaborne metallurgical coal supply from leading metallurgical coal exporting countries of Australia, the U.S., Russia, Canada, Mongolia and Mozambique, among others.

Major international direct competitors (listed alphabetically) include Anglo American, Arch Resources, Inc., BHP, Glencore, Jellinbah, KRU, Shanxi Coking Coal Group, Teck Resources, Warrior Met Coal, Whitehaven Coal Limited and Yancoal Australia Ltd, among others.

Cybersecurity Risk Management

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Risk Factors.”

Working Capital

We generally fund our working capital requirements through a combination of existing cash and cash equivalents and proceeds from the sale of our coal production to customers.

Our current accounts receivable securitization program and revolving credit facility are also available to fund our working capital requirements to the extent we have remaining availability.

Refer to the “Liquidity and Capital Resources” section of Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information regarding working capital.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

Human Capital

We had approximately 4,600 employees as of December 31, 2020, including approximately 3,500 hourly employees.

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“Management — Labor Relations” to the accompanying consolidated financial statements, which information is incorporated herein by reference.

During the year ended December 31, 2020, we reduced our global headcount by nearly 2,000 employees, in both operational and non-operational positions, representing approximately 30% of our workforce.

The reductions were made in connection with our cost repositioning efforts to appropriately align our cost structure and optimize our coal production relative to prevailing market conditions.

As of December 31, 2020, approximately 2,900 of our employees are located in the U.S., with the remainder primarily located in Australia.

About 92% of our team members work for mine operations in the U.S.

and Australia, while the remaining are employed at our global headquarters in St.

Louis or other business offices.

We strive to create a strong, united workforce with a commitment to safety as a way of life.

In 2020, we achieved a global safety incidence rate of 1.67 incidents per 200,000 hours worked, which was 43% better than the 2019 U.S.

industry average incidence rate of 2.93 incidents per 200,000 hours worked per the Mine Safety and Health Administration (MSHA).

We offer an inclusive work environment and engage, recognize and develop employees.

We seek a workforce that is comprised of diverse backgrounds, thoughts and experiences.

Our company strives to attract and retain the best people, develop their potential and align their skills to important initiatives and activities.

We believe in fostering an inclusive work environment built on mutual trust, respect and engagement.

We invest in our employees through health and wellness programs, competitive total rewards and development opportunities.

The typical Peabody employee has approximately nine years of experience with the company, and more than 60% of all Peabody employees remain employed with the company for more than five years.

We offer a variety of learning events, including mentoring and development programs to aid our employees in their career growth.

During the past five years, approximately 36% of open positions and 70% of director and above positions have been filled by internal candidates through promotions and lateral career development opportunities.

Information About Our Executive Officers

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Executive officers are appointed by, and hold office at the discretion of, our Board of Directors, subject to the terms of any employment agreements.

President and Chief Executive Officer

Interim Chief Financial Officer

Executive Vice President, Chief Legal Officer, Governmental Affairs and Corporate Secretary

Executive Vice President and Chief Operating Officer

Senior Vice President and Chief Human Resources Officer

President - Australian Operations

Kemal Williamson

President - U.S.

Kellow 53 President and Chief Executive Officer

Spurbeck 47 Executive Vice President and Chief Financial Officer

Jarboe 47 Chief Legal Officer and Corporate Secretary

Yeates 60 Executive Vice President and Chief Operating Officer

Richard 61 Senior Vice President and Chief Human Resources Officer

Hathhorn 50 President - Australian Operations

Kemal Williamson 61 President - U.S.

(1) As of February 16, 2021.

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Kellow has held chief executive leadership, operating and financial roles in global business in the coal, copper, nickel, aluminum, steel, oil and gas sectors.

He serves as Chairman of the World Coal Association, a director and executive committee member of the U.S.

National Mining Association and the Vice Chairman of the International Energy Agency Coal Industry Advisory Board.

Kellow is a graduate of the Advanced Management Program at the University of Pennsylvania’s Wharton School of Business, holds a Master of Business Administration Degree and a Bachelor’s Degree in Commerce from the University of Newcastle.

He serves as a Vice Chairman of the U.S.

National Mining Association and a director and former Chairman of the World Coal Association.

Kellow is a graduate of the Advanced Management Program at the University of Pennsylvania’s Wharton School of Business and holds a Master of Business Administration Degree and a Bachelor’s Degree in Commerce from the University of Newcastle.

He also holds an honorary Doctor of Science degree from the South Dakota School of Mines and Technology.

Spurbeck was named our Interim Chief Financial Officer in January 2020.

Spurbeck has more than 20 years of accounting and financial experience, most recently serving as the Company’s Senior Vice President and Chief Accounting Officer since March 2018.

In this role, he has overseen Peabody’s finance, treasury, tax, internal audit, financial reporting and corporate accounting functions.

Peabody Energy Corporation 2020 Form 10-K

Spurbeck was named our Executive Vice President and Chief Financial Officer in June 2020, after serving in an interim capacity from January 2020 through June 2020.

He oversees finance, treasury, tax, internal audit, financial reporting, financial planning, risk and mine finance, corporate accounting functions and investor relations and corporate communications.

Spurbeck has more than 25 years of accounting and financial experience, most recently serving as the Company’s Senior Vice President and Chief Accounting Officer from early 2018 to January 2020.

Prior to joining Peabody, Mr.

Spurbeck served as Vice President of Finance and Chief Accounting Officer at Coeur Mining, Inc., a diversified precious metals producer, from March 2013 to January 2018.

He also previously held multiple financial positions at Newmont Mining Corporation, a leading gold and copper producer, including Group Executive, Assistant Controller.

Spurbeck also previously served in several financial positions at First Data Corporation, a financial services company, and Deloitte LLP, an international accounting, tax and advisory firm.

He also previously held multiple financial positions at Newmont Mining Corporation, a leading gold and copper producer, First Data Corporation, a financial services company, and Deloitte LLP, an international accounting, tax and advisory firm.

Spurbeck is a Certified Public Accountant and holds a Bachelor’s Degree in Accounting from Hillsdale College.

Verona Dorch was named our Executive Vice President, Chief Legal Officer, Governmental Affairs and Corporate Secretary in August 2015.

In this role, she has executive responsibility for providing comprehensive legal and government relations counsel for Peabody’s business activities and leads the Company’s global legal, government affairs and compliance functions.

Dorch has close to 25 years of legal experience counseling diverse global businesses.

Prior to joining Peabody, from 2006 to March 2015, she served in a variety of roles for Harsco Corporation, a leading global industrial services company, where she advised the leadership team and board on strategic legal and business initiatives, most recently serving as Chief Legal Officer, Chief Compliance Officer and Corporate Secretary.

She also has experience in corporate and securities law from top-tier law firms and with Sumitomo Chemical Co.

following a multi-year secondment in Tokyo, Japan.

Dorch is a Fellow of the American Bar Foundation and is a member of the board of directors of Enterprise Bank & Trust, a regional bank with over $5.5 billion in assets, and is a member of the boards of directors of Girls Inc.

Louis) and the United Way (St.

Dorch holds a Bachelor’s Degree from Dartmouth College and a Juris Doctor degree from Harvard Law School.

Peabody Energy Corporation

2019 Form 10-K

Meintjes was named our Executive Vice President - Corporate Services and Chief Commercial Officer in April 2017 and our Executive Vice President and Chief Operating Officer in July 2019.

Meintjes has executive responsibility for operations, sales and marketing and technical services.

Meintjes has extensive senior operational, strategy, continuous improvement and information technology experience with mining companies on three continents.

He has also led financial and technical functions, large re-engineering programs, information technology system implementations and large industrial construction projects.

He joined us in 2007, and prior to serving in his current post, he was our President - Australia.

Other past positions with us include Acting President - Americas, Group Executive of Midwest and Colorado Operations, Senior Vice President of Operations Improvement and Senior Vice President Engineering and Continuous Improvement.

Prior to joining us, Mr.

Meintjes served as a consultant to Exxaro Resources Limited in South Africa, and is a former Executive Director and Board Member for Kumba Resources Limited in South Africa.

He has senior management experience in the steel and the aluminum industries with Iscor and Alusaf in South Africa.

Meintjes holds dual Bachelor of Commerce degrees in accounting from Rand Afrikaans University and the University of South Africa.

He is a Chartered Accountant in South Africa and completed the advanced management program at the University of Pennsylvania’s Wharton School of Business.

Jarboe was named our Chief Legal Officer and Corporate Secretary in March 2020.

In this role, he has executive responsibility for providing comprehensive legal counsel for Peabody’s business activities and leads the Company’s global legal and compliance functions.

Jarboe joined Peabody in 2010 and has served in a variety of legal roles.

He most recently led the Litigation, Disputes and Labor & Employment activities for Peabody.

Prior to joining Peabody, Mr.

Jarboe practiced law with Husch Blackwell LLP and Bryan Cave LLP.

Jarboe holds a Bachelor of Arts Degree from the University of Kansas, a Master’s Degree from the University of Missouri – Kansas City and a Juris Doctor degree from Washington University School of Law.

Yeates was named our Executive Vice President and Chief Operating Officer in October 2020.

He has executive responsibility for operations, sales and marketing and technical services.

Yeates has over 35 years of mining industry experience.

From May 2018 to December 2019, Mr.

Yeates served as Chief Operating Officer of MACH Energy Australia, a developer and supplier of thermal coal to both the Australian domestic and Asian export markets.

From January 2014 until June 2016, Mr.

Yeates served as the Chief Executive Officer of GVK Hancock Coal, a joint venture developing the vast potential of the Galilee Basin in Central Queensland.

Prior to that, he spent over 22 years with Rio Tinto, a global mining group, including as Acting Managing Director and Chief Operating Officer for Coal Australia, General Manager Ports and Infrastructure for Pilbara Iron and General Manager Tarong Coal.

Prior to joining Rio Tinto, Mr.

Yeates worked for six years for BHP, a mining, metals and petroleum company, in coal operations and metalliferous exploration.

Yeates has a Bachelor of Engineering (Mining) from the University of Queensland, a Graduate Diploma in Management from the University of Central Queensland and a Graduate Diploma of Applied Finance and Investment from the Securities Institute of Australia.

He has an Executive MBA from the Monash Mt Eliza Business School and is a Fellow of the Australian Institute of Company Directors.

Richard was named our Senior Vice President and Chief Human Resources Officer in November 2017.

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Hathhorn holds a Bachelor of Science Degree in Mining Engineering from the University of Idaho, College of Mines.

Peabody Energy Corporation 2020 Form 10-K

Kemal Williamson was named our President - Americas in October 2012 and his title was updated to President - U.S.

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He most recently served as Group Executive of Operations for the Peabody Energy Australia operations.

He also has held executive leadership roles across project development, as well as in positions overseeing our Western U.S., Powder River Basin and Midwest operations.

He also has held executive leadership roles across project development, as well as in positions overseeing our Powder River Basin and Other U.S.

Thermal operations.

Williamson joined us in 2000 as Director of Land Management.

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Williamson holds a Bachelor of Science Degree in Mining Engineering from Pennsylvania State University as well as a Master of Business Administration Degree from the Kellogg School of Management, Northwestern University in Evanston, Illinois.

Filing Under Chapter 11 of the United States Bankruptcy Code

On April 13, 2016, Peabody and a majority of its wholly owned domestic subsidiaries as well as one international subsidiary in Gibraltar (collectively with Peabody, the Debtors) filed voluntary petitions for reorganization under Chapter 11 of Title 11 of the U.S.

Code in the U.S.

Bankruptcy Court for the Eastern District of Missouri (the Bankruptcy Court).

The Debtors’ Chapter 11 cases (collectively, the Chapter 11 Cases) were jointly administered under the caption In re Peabody Energy Corporation, et al.

16-42529 (Bankr.

On March 17, 2017, the Bankruptcy Court entered an order, Docket No.

2763, confirming the Debtors’ Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession (as further modified, the Plan).

On April 3, 2017 (the Effective Date), the Debtors satisfied the conditions to effectiveness set forth in the Plan, the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases.

Peabody Energy Corporation

2019 Form 10-K

On March 22, 2017, a group of creditors (the Ad Hoc Committee) that held certain interests in the Company’s prepetition indebtedness appealed the Bankruptcy Court’s order confirming the Plan, requesting that the United States District Court for the Eastern District of Missouri (the District Court) reverse the Bankruptcy Court’s confirmation of the Plan and the order approving the Private Placement Agreement and Backstop Commitment Agreement.

On December 29, 2017, the District Court entered an order dismissing the Ad Hoc Committee’s appeal, and, in the alternative, affirming the order confirming the Plan.

On January 26, 2018, the Ad Hoc Committee appealed the District Court’s order to the United States Court of Appeals for the Eighth Circuit (the Eighth Circuit).

In its appeal, the Ad Hoc Committee asked the Eighth Circuit to award the Ad Hoc Committee members either unspecified damages or the right to buy an unspecified amount of Company stock at a discount.

Oral argument on the appeal was held April 16, 2019, and the Eighth Circuit issued a unanimous opinion in Peabody’s favor on August 9, 2019.

The Ad Hoc Committee did not seek rehearing or petition the Supreme Court for certiorari by the deadline of November 7, 2019.

Upon emergence, in accordance with Accounting Standards Codification (ASC) 852, we applied fresh start reporting to our consolidated financial statements as of April 1, 2017 and became a new entity for financial reporting purposes reflecting the Successor (as defined below) capital structure.

As a new entity, a new accounting basis in the identifiable assets and liabilities assumed was established with no retained earnings or accumulated other comprehensive income (loss).

For additional details, refer to Note 1.

“Summary of Significant Accounting Policies” and Note 2.

“Reorganization Items” to the accompanying consolidated financial statements.

Regulatory Matters — U.S.

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The enacted legislation mandates the previous rates of $1.10 per ton for deep-mined coal and up to $0.55 per ton for surface-mined coal, neither amount to exceed 4.4% of the gross sales price.

Peabody Energy Corporation

2019 Form 10-K

We recognized expense related to the tax of $31.4 million, $78.6 million, $60.9 million and $20.1 million for the years ended December 31, 2019 and 2018, the period April 2 through December 31, 2017 and the period January 1 through April 1, 2017, respectively.

We recognized expense related to the tax of $53.3 million, $31.4 million and $78.6 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Peabody Energy Corporation 2020 Form 10-K

The Affordable Care Act includes significant changes to the federal black lung program including an automatic survivor benefit paid upon the death of a miner with an awarded black lung claim and establishes a rebuttable presumption with regard to pneumoconiosis among miners with 15 or more years of coal mine employment that are totally disabled by a respiratory condition.

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We are also affected by various other federal, state, local and tribal environmental laws and regulations that impact our customers.

Temporary Enforcement Policy.

On March 26, 2020, the United States Environmental Protection Agency (EPA) announced a temporary policy regarding EPA enforcement of environmental legal obligations as a result of the COVID-19 pandemic.

(COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program).

Under the temporary policy, the EPA exercised enforcement discretion for certain noncompliance events that occurred during the period of time that the temporary policy was in effect and that resulted from the COVID-19 pandemic.

The EPA’s temporary policy did not provide leniency for intentional criminal violations of law and imposed conditions on any violation that may result in “acute risk or an imminent threat to human health or the environment.” The policy also did not apply to activities that were carried out under Superfund and Resource Conservation and Recovery Act (RCRA) Corrective Action enforcement instruments.

The EPA's temporary policy became effective on March 13, 2020 and remained in effect until August 31, 2020.

Surface Mining Control and Reclamation Act .

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Where state regulatory agencies have adopted federal mining programs under SMCRA, the state becomes the primary regulatory authority, with oversight from OSMRE.

Except for Arizona, states in which we have active mining operations have achieved primacy control of enforcement through federal authorization.

In Arizona, we mine on tribal lands and are regulated by the OSMRE because the tribes do not have SMCRA authorization.

States in which we have active mining operations have achieved primacy control of enforcement through federal authorization.

In Arizona, where we will be performing reclamation work on tribal lands, we are regulated by the OSMRE because the tribes do not have SMCRA authorization.

SMCRA provides for three categories of bonds:

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operations significantly exceeds the financial liability for final mine reclamation because the asset retirement obligation liability is discounted from the end of the mine’s economic life to the balance sheet date in recognition that the final reclamation cash outlay is projected to be a number of years away.

The bond amount, in contrast with the asset retirement obligation, presumes reclamation begins immediately.

The bond amount, in contrast with the asset retirement obligation, presumes reclamation begins immediately, as well as different assumptions related to the cost of equipment and services utilized in the reclamation process.

After a permit application is prepared and submitted to the regulatory agency, it goes through a completeness and technical review.

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Federal coal leases also require an approved federal mining permit under the signature of the Assistant Secretary of the Department of the Interior.

Peabody Energy Corporation 2020 Form 10-K

The SMCRA Abandoned Mine Land Fund requires a fee on all coal produced in the U.S.

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Pursuant to the Tax Relief and Health Care Act of 2006, from October 1, 2012 through September 30, 2021, the fee is $0.28 and $0.12 per ton of surface-mined and underground-mined coal, respectively.

We recognized expense related to the fees of $36.5 million, $40.9 million, $31.6 million and $10.3 million for the years ended December 31, 2019 and 2018, the period April 2 through December 31, 2017 and the period January 1 through April 1, 2017, respectively.

Peabody Energy Corporation

2019 Form 10-K

We recognized expense related to the fees of $28.4 million, $36.5 million and $40.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Clean Air Act (CAA) .

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Direct impacts on coal mining and processing operations may occur through the CAA permitting requirements and/or emission control requirements relating to particulate matter (PM), nitrogen dioxide, ozone and sulfur dioxide (SO 2 ).

In recent years, the United States Environmental Protection Agency (EPA) has adopted more stringent national ambient air quality standards (NAAQS) for PM, nitrogen oxide, ozone and SO 2 .

It is possible that these modifications, as well as future modifications to NAAQS, could directly or indirectly impact our mining operations in a manner that includes, but is not limited to, designating new nonattainment areas or expanding existing nonattainment areas, serving as a basis for changes in vehicle emission standards or prompting additional local control measures pursuant to state implementation plans required to address revised NAAQS.

In recent years, the EPA has adopted more stringent national ambient air quality standards (NAAQS) for PM, nitrogen oxide, ozone and SO 2 .

It is possible that these modifications, as well as future modifications to NAAQS, could directly or indirectly impact our mining operations in a manner that includes, but is not limited to, designating new nonattainment areas or expanding existing nonattainment areas, serving as a basis for changes in vehicle and/or engine emission standards or prompting additional local control measures pursuant to state implementation plans required to address revised NAAQS.

In 2009, the EPA adopted revised rules to add more stringent PM emissions limits for coal preparation and processing plants constructed or modified after April 28, 2008.

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The court, however, remanded the secondary ozone NAAQS standard to the EPA and vacated a “grandfathering” provision concerning the use of the prior ozone NAAQS in certain permitting actions.

The EPA is additionally considering revisions to the 2015 PM NAAQS as part of the periodic review process required by the CAA, with any revisions to the standards projected for late 2020, the same timeframe as it contemplates possible revisions for the 2015 ozone NAAQS.

The Clean Air Act requires the EPA to review NAAQS every five years to determine whether revision to current standards are appropriate.

As part of this recurring review process, the EPA proposed to retain the ozone standards promulgated in 2015, including current secondary standards.

The EPA also proposed to retain the PM standards promulgated in 2012 (85 Fed.

On December 18, 2020, the EPA issued a final rule to retain both the primary annual and 24-hour PM standards for fine particulate matter (PM 2.5 ) and the primary 24-hour standard for coarse particulate matter (PM 10 ) and secondary PM 10 standards.

On December 31, 2020, the EPA issued a final rule to retain the current primary and secondary ozone standards.

More stringent PM or ozone standards would require new state implementation plans to be developed and filed with the EPA and may trigger additional control technology for mining equipment or result in additional challenges to permitting and expansion efforts.

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The EPA promulgated a final rule to limit carbon dioxide (CO 2 ) from new, modified and reconstructed fossil fuel-fired EGUs under Section 111(b) of the CAA on August 3, 2015, and published it in the Federal Register on October 23, 2015.

Peabody Energy Corporation 2020 Form 10-K

This rule requires that newly-constructed fossil fuel-fired steam generating units achieve an emission standard for carbon dioxide of 1,400 lb carbon dioxide per megawatt-hour gross output (CO 2 /MWh-gross).

The standard is based on the performance of a supercritical pulverized coal boiler implementing partial carbon capture, utilization and storage (CCUS).

The standard (known as the Best System of Emission Reduction (BSER)) is based on the performance of a supercritical pulverized coal boiler implementing partial carbon capture, utilization and storage (CCUS).

Modified and reconstructed fossil fuel-fired steam generating units must implement the most efficient generation achievable through a combination of best operating practices and equipment upgrades, to meet an emission standard consistent with best historical performance.

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Notice of final action denying petitions for reconsideration.” Pursuant to an order of the court, these cases remain in abeyance, subject to requirements for the EPA to file 90-day status reports.

Thus, the NSPS remains in effect.

Peabody Energy Corporation

2019 Form 10-K

On December 20, 2018, the EPA proposed to revise the 2015 NSPS to modify the minimum requirements for newly constructed coal-fired units from partial carbon capture and storage to efficiency-based standards.

The proposal now defines the Best System of Emission Reduction (BSER) as the most efficient demonstrated steam cycle in combination with the best operating practices.

The EPA has noted that the primary reason for this proposed revision is the high costs and limited geographic availability of carbon capture and storage technology.

The comment period on the proposed rule concluded on February 19, 2019.

In contrast to the 2015 rule, the proposed rule defined BSER as the most efficient demonstrated steam cycle in combination with the best operating practices.

The EPA indicated that the primary reason for revising BSER was the high cost and limited geographic availability of carbon capture and storage technology.

Status reports filed with the D.C.

Circuit in North Dakota v.

EPA indicate that litigation on the 2015 rule should remain in abeyance pending the EPA’s action on the proposed rule.

On January 13, 2021, the EPA promulgated a final rule which did not address BSER, but rather finalized a pollutant-specific significant contribution determination for greenhouse gas emissions from EGUs of 3%.

Thus, the NSPS remains in effect.

EPA Regulation of Greenhouse Gas Emissions from Existing Fossil Fuel-Fired EGUs .

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Circuit granted the EPA’s motion to hold the case in abeyance while the agency reconsidered the rule.

Circuit case has been in abeyance since, so no opinion has been issued.

In October 2017, the EPA proposed to repeal the CPP.

In August 2018, the EPA issued a proposed rule to replace the CPP, the Affordable Clean Energy (ACE) Rule.

In August 2018, the EPA issued a proposed rule to replace the CPP, with the Affordable Clean Energy (ACE) Rule.

44,746 (August 31, 2018)).

On June 19, 2019, the EPA issued a combined package that finalizes the CPP repeal rule as well as the replacement rule, ACE.

On June 19, 2019, the EPA issued a combined package that finalized the CPP repeal rule as well as the replacement rule, ACE.

(Repeal of the Clean Power Plan;

Emission Guidelines for Greenhouse Gas Emissions from Existing Electric Utility Generating Units;

Revisions to Emission Guidelines Implementing Regulations, EPA-HQ-OAR-2017-0355.

The final ACE rule sets emissions guidelines for greenhouse gas emissions from existing EGUs based on using efficiency heat rate improvements as “Best System of Emission Reduction” measures.

Revisions to Emission Guidelines Implementing Regulations, 84 Fed.

32,520 (July 8, 2019)).

The ACE rule sets emissions guidelines for greenhouse gas emissions from existing EGUs based on a determination that efficiency heat rate improvements constitute the BSER.

The EPA’s final rule also revises the CAA Section 111(d) regulations to give the states greater flexibility on the content and timing of their state plans.

Proposed revisions to the regulations under the New Source Review (NSR) program that were part of the ACE proposal were separated, and the EPA indicated that it intends to take final action on the proposed NSR program reforms at a later date.

Based on the EPA’s final rules repealing and replacing the CPP, petitioners in the D.C.

Circuit matter seeking review of CPP, including Peabody, filed a motion to dismiss, which the court granted in September 2019.

Meanwhile, challengers to the ACE Rule have filed petitions for judicial review, and that new litigation is expected to continue into 2020.

Peabody Energy Corporation 2020 Form 10-K

Numerous petitions for review challenging the ACE Rule were filed in the D.C.

Circuit and consolidated in American Lung Association v.

19-1140 (D.C.

This litigation has been fully briefed and oral argument before a 3-judge panel of the D.C.

Circuit was held on October 8, 2020.

The oral argument was organized around four issue areas concerning the EPA’s repeal of the CPP, the EPA’s authority to regulate power plants under the CAA, whether the ACE rule properly interpreted and applied the CAA and the treatment of biomass in the ACE Rule.

On January 19, 2021, the panel held that the ACE Rule and its repeal of the CPP were to be vacated and remanded to the EPA.

It also vacated amendments to the implementing regulations that extended the compliance timeline.

EPA’s Greenhouse Gas Permitting Regulations for Major Emission Sources .

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Subsequently, the EPA removed the vacated elements from its rules to ensure that neither the PSD nor Title V rules require a source to obtain a permit solely because the source emits or has the potential to emit greenhouse gases above the applicable thresholds.

The EPA therefore no longer has the authority to conduct PSD permitting for Step 2 sources, nor can the EPA approve provisions submitted by a state for inclusion in its state implementation plan (SIP) providing this authority.

Cross State Air Pollution Rule (CSAPR) and CSAPR Update Rule .

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45,481 (Sept.

Peabody Energy Corporation

2019 Form 10-K

On October 26, 2016, the EPA published the final CSAPR Update Rule to address implementation of the 2008 ozone NAAQS.

This rule imposed further reductions in nitrogen oxides emissions beginning in 2017 in 22 states subject to CSAPR.

This rule imposed reductions in nitrogen oxides emissions beginning in 2017 in 22 states subject to CSAPR.

Several states and utilities, as well as agricultural and industry groups, filed petitions for review of the CSAPR Update Rule in the D.C.

On September 13, 2019, the CSAPR Update Rule was subsequently remanded to the EPA to address the court’s holding that the rule unlawfully allows significant contribution to continue beyond downwind attainment deadlines.

16-1406 (D.C.

At this time, it is unknown whether rehearing will be sought.

In 2018, the EPA also issued a final determination that the existing CSAPR Update fully addressed the CAA’s “good neighbor” requirements for 20 states with respect to the 2008 NAAQS for ground-level ozone.

On September 13, 2019, the D.C.

Circuit held that the CSAPR Update Rule did not comply with provisions of the Clean Air Act requiring upwind states to address air pollution which significantly interferes with the ability of a downwind state or states to attain NAAQS by relevant compliance dates.

The court thus remanded the CSAPR Update Rule to the EPA in order for the Agency to address the court’s decision.

In 2018, the EPA issued another determination that the existing CSAPR Update Rule fully addressed the CAA’s “good neighbor” requirements for 20 states with respect to the 2008 NAAQS for ground-level ozone.

This determination was also challenged in the D.C.

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Circuit issued a judgment vacating this rule on the basis of the court’s decision in Wisconsin v.

At this time, it is unknown whether rehearing will be sought.

Additional litigation concerning the interstate transport of air pollution and the EPA’s response under the Clean Air Act continues.

In Maryland v.

18-1285), the D.C.

Circuit upheld EPA determinations that upwind states had not met their burden in seeking relief from transported air pollution under the same Clean Air Act provisions at issue in Wisconsin .

In New York v.

19-1231 (D.C.

Cir., July 14, 2020), the D.C.

Circuit vacated the EPA’s denial of a Clean Air Act section 126 petition requesting that the Agency find approximately 350 sources of nitrogen oxides in nine States were contributing significantly to nonattainment in the New York Metropolitan Area.

The court remanded the denial to the EPA for further proceedings consistent with the court’s opinion.

EPA has proposed a rule to address the court’s remand in Wisconsin as well as NOx emissions in 21 states targeted by the CSAPR Update Rule.

The proposed rule would find that 9 of the states identified do not significantly contribute to downwind nonattainment and/or maintenance issues and therefore do not need additional emission reductions.

For the 12 other states, EPA has proposed to adjust state NOx budgets downward and create a new emission trading program.

Mercury and Air Toxic Standards (MATS) .

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The rule provided three years for compliance with MACT standards and a possible fourth year if a state permitting agency determined that such was necessary for the installation of controls.

Peabody Energy Corporation 2020 Form 10-K

Following issuance of the final rule, numerous petitions for review were filed.

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On December 27, 2018, the EPA issued a proposed revised Supplemental Cost Finding for the MATS rule that would revoke the determination that regulating HAPs from coal-fired power plants is “appropriate and necessary” under Section 112(n)(1)(A) of the CAA.

The new proposed finding was based on an EPA assessment that health and environmental benefits from the MATS rule that are not directly related to mercury pollution should not be included in the benefit portion of the analysis.

In the new proposed cost-benefit analysis, the EPA found the costs “grossly outweigh” any possible benefits.

The comment period for this proposed rule closed in spring 2019 with over a half million public comments filed.

The final rule was expected in the fall but stalled after being sent to the White House in October 2019 for final review before public release.

It is unclear when the final rule will be published.

The EPA Science Advisory Board, made up of non-EPA scientists and experts who review the EPA’s basis for regulatory decisions, recommended in December 2019 that the EPA conduct a new risk assessment concerning the rule.

The plan would leave the emissions standards of the MATS rule in effect but would repeal the statutorily required finding that it was "appropriate and necessary" to originally issue the standards.

Many argue this could lead to industry lawsuits aimed at fully eliminating the standards.

The proposed finding was based on an EPA assessment that health and environmental benefits from the MATS rule were not directly related to mercury pollution and should not be included in the benefit portion of the analysis.

A final rule reversing EPA’s 2016 Supplemental Finding and determining, in lieu, that it is not “appropriate and necessary” to regulate HAP emissions from coal- and oil-fired power plants was promulgated in May 2020.

31,286 (May 22, 2020).

This rule also finalized residual risk and technology review standards for the coal- and oil-fired EGU source category.

Both actions have been challenged in the D.C.

See American Academy of Pediatrics et al.

Wheeler , No.

20-1221 (D.C.

Cir.), Air Alliance Houston, et al v.

20-1268 (D.C.

Federal Coal Leasing Moratorium .

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Following the EI Order, the Interior Secretary issued Order 3349 ending the federal coal leasing moratorium.

Environmental groups took the issue to court and in September 2018, Wyoming and Montana opposed the suits in court and defended against the freeze possibly being reinstated.

This litigation is ongoing.

Environmental groups took the issue to court (District of Montana) and in April 2019, the Court held the lifting of the moratorium triggered National Environmental Policy Act (NEPA) review.

On May 22, 2020, the Court held that the Department of the Interior’s issuance of an Environmental Assessment and Finding of No Significant Impact (FONSI) remedied the prior NEPA violations.

Environmental groups have since amended their complaint to challenge the Environmental Assessment and FONSI, and the litigation remains pending.

Clean Water Act (CWA) .

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Regular monitoring, reporting and performance standards are requirements of NPDES permits that govern the discharge of water from mine-related point sources into receiving waters.

Peabody Energy Corporation

2019 Form 10-K

Army Corps of Engineers (Corps) regulates certain activities affecting navigable waters and waters of the U.S., including wetlands.

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State and tribal regulators consider whether the activity will comply with their water quality standards and other applicable requirements in deciding whether or not to certify the activity.

On August 9, 2019, the EPA issued a proposed rule intended to clarify the scope of the state or tribal regulators’ authority that, if adopted in its current form, would in effect limit state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections.

The comment period for this proposed rule closed on October 21, 2019.

On June 1, 2020, the EPA issued a final rule intended to clarify the scope of the state or tribal regulators’ authority that could in effect limit state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections in some circumstances.

Peabody Energy Corporation 2020 Form 10-K

New Source Review (NSR).

The Clean Air Act imposes permitting requirements when a new source undergoes construction or when an existing source is reconstructed or undergoes a major modification.

These requirements are contained in the Clean Air Act’s PSD and Nonattainment New Source Review programs, generally referred to as NSR.

On March 25, 2020, the EPA released a draft guidance document that would allow power plants, refineries and other sources of emissions to begin certain construction activities while still awaiting a permit under the NSR program.

Under the EPA’s revised interpretation, a source owner or operator may, prior to obtaining a NSR permit, undertake physical on-site activities, including activities that may significantly alter the site and/or are permanent in nature, provided that those activities do not constitute physical construction on an emissions unit.

The comment period on the draft memo ended May 11, 2020.

On August 4, 2020, the EPA released a guidance memorandum concerning implementation of plantwide applicability limitations (PALs) (Guidance on Plantwide Applicability Limitation Provisions Under the New Source Review Regulations).

PALs allow sources to make physical and operational changes under a plantwide emission limit without “triggering” NSR.

The EPA has also taken action on a number of different rules and guidance affecting the interpretation and application of NSR.

In a final rule (83 Fed.

15, 2018)), the EPA completed reconsideration of a 2009 petition to clarify when certain actions must be “aggregated” for purposes of determining whether these actions are part of a single project to which NSR applies.

The EPA has additionally published guidance on the definition of “ambient air” (Revised Policy on Exclusions from “Ambient Air,” Dec.

2, 2019) and guidance concerning when multiple air pollution-emitting activities may be considered to be “adjacent” so that they should be considered to be a single source (Interpreting “Adjacent” for New Source Review and Title V Source Determinations in All Industries Other Than Oil and Gas, Nov.

Additional memorandum and applicability determinations have also been made that address other NSR issues.

These rules, guidance and memorandum may therefore affect the construction, reconstruction and modification of sources and the level of pollution control requirements that will be necessary on a case-by-case basis.

CWA Definition of “Waters of the United States”.

A final rule defining the scope of waters protected under the CWA (commonly called the Waters of the United States, or WOTUS) (WOTUS Rule), was published by the EPA and the Corps in June 2015.

Several states and others subsequently filed lawsuits challenging the WOTUS Rule.

Several states and others subsequently filed lawsuits challenging the 2015 WOTUS Rule, and eventually that rule was preliminarily enjoined in over half of the country.

On October 22, 2019, the EPA and the Corps jointly published a final rule, which became effective on December 23, 2019, repealing the 2015 WOTUS Rule and recodifying the regulatory definitions of WOTUS that existed prior to the implementation of the WOTUS Rule.

Several states subsequently filed a lawsuit against the EPA, claiming that the rollback of protections for certain U.S.

waterways pursuant to the final rule is arbitrary, capricious and not in accordance with law.

On January 23, 2020, the EPA and the Corps finalized the Navigable Waters Protection Rule to define “Waters of the United States” and thereby establish federal regulatory authority under the CWA.

The final rule will become effective 60 days after publication in the Federal Register.

Once effective, it replaces the rule published on October 22, 2019.

On January 23, 2020, the EPA and the Corps finalized the Navigable Waters Protection Rule to revise the definition of “Waters of the United States” and thereby establish the scope of federal regulatory authority under the CWA.

A federal district judge in Colorado preliminarily enjoined the Navigable Waters Protection Rule in the State of Colorado on June 19, 2020.

The new rule took effect in all other states on June 22, 2020, but the pre-2015 definitions apply in Colorado.

Litigation over both the 2019 repeal rule and the 2020 Navigable Waters Protection Rule remains pending in several federal district courts.

Effluent Limitations Guidelines for the Steam Electric Power Generating Industry .

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The Court vacated those portions of the rule.

On November 22, 2019, the EPA issued a proposed rule to revise the technology-based effluent limitations guidelines and standards for the steam electric power generating point source category applicable to flue gas desulfurization wastewater and bottom ash transport water.

The comment period for this proposed rule closed on January 21, 2020.

If the proposed rule is adopted in its current form, the effluent limitations guidelines will significantly increase costs for many coal-fired steam electric power plants.

The EPA has not yet determined how to address the vacated portions of the 2015 rule following the Fifth Circuit’s decision.

Separately, on October 13, 2020, the EPA issued a final rule revising the technology-based effluent limitations guidelines and standards for the steam electric power generating point source category applicable to flue gas desulfurization wastewater and bottom ash transport water.

As finalized, the revised effluent limitations guidelines could significantly increase costs for many coal-fired steam electric power plants.

National Environmental Policy Act (NEPA) .

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The NEPA process involves public participation and can involve lengthy timeframes.

The White House Council on Environmental Quality (CEQ) issued an Advance Notice of Proposed Rulemaking in June 2018 seeking comment on a number of ways to streamline and improve the NEPA process.

The comment period closed in August 2018.

It is unclear how far reaching the changes will be and if they will be able to withstand expected court challenges.

The White House Council on Environmental Quality issued a final rule comprehensively updating and modernizing its longstanding NEPA regulations on July 16, 2020.

The final rule seeks to reduce unnecessary paperwork, burdens and delays, promote better coordination among agency decision makers, and clarify scope of NEPA reviews, among other things.

States and environmental groups have filed several lawsuits challenging the final rule.

Resource Conservation and Recovery Act (RCRA) .

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Coal mine wastes, such as overburden and coal cleaning wastes, are not considered hazardous wastes under RCRA.

Peabody Energy Corporation 2020 Form 10-K

Subtitle C of RCRA exempted fossil fuel combustion wastes from hazardous waste regulation until the EPA completed a report to Congress and made a determination on whether the wastes should be regulated as hazardous.

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As finalized, the rule continues the exemption of CCR from regulation as a hazardous waste, but does impose new requirements at existing CCR surface impoundments and landfills that will need to be implemented over a number of different time-frames in the coming months and years, as well as at new surface impoundments and landfills.

Court of Appeals for the D.C.

Circuit held that certain provisions of the EPA’s CCR rule were not sufficiently protective, and it invalidated those provisions.

On December 2, 2019, the EPA issued a proposed rule to implement amended rules regarding CCR in response to the court decisions.

The comment period for this proposed rule closed on January 31, 2020.

Generally, EPA-imposed requirements will increase the cost of CCR management, but not as much as if the rule had regulated CCR as hazardous.

Peabody Energy Corporation

2019 Form 10-K

Proposed Rule for Disposal of CCR from Electric Utilities;

Federal CCR Permit Program and Revisions to Closure Requirements.

On February 20, 2020, as required by the Water Infrastructure Improvements for the Nation Act, the EPA proposed a federal permitting program for the disposal of CCR in surface impoundments and landfills.

Under the proposal, the EPA would directly implement the permit program in Indian Country, and at CCR units located in states that have not submitted their own CCR permit program for approval.

The proposal includes requirements for federal CCR permit applications, content and modification, as well as procedural requirements.

The comment period for the EPA’s proposal ended on April 20, 2020.

The EPA expects to issue a final rule around May 2021.

Separately, on August 28, 2020, the EPA finalized certain amendments to its 2015 CCR rule to partially address the D.C.

Circuit’s 2018 decision holding that certain provisions of that rule were not sufficiently protective.

The EPA is still deciding how to further revise the 2015 rule to address the remainder of the court decision, and the EPA expects to issue a proposed rule in the summer of 2021.

Generally, EPA-imposed requirements will increase the cost of CCR management, but not as much as if the rule had regulated CCR as hazardous.

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

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The Department of the Interior issued three proposed rules in 2018 aiming to streamline and update the ESA.

The three final rules became effective on September 26, 2019.

The three final rules became effective on September 26, 2019 and are currently the subject of a pending legal challenge filed in the U.S.

District Court for the Northern District of California by a coalition of 18 states.

Use of Explosives .

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The decision cited its lack of statutory authority and the sufficiency of the existing regulatory framework.

Grid Resiliency Pricing Rule .

On October 10, 2017, the Secretary of Energy (the Secretary) published a Notice of Proposed Rulemaking entitled the Grid Resiliency Pricing Rule (the Proposed Rule).

The Proposed Rule was issued by the Secretary pursuant to Section 403 of the Department of Energy Organization Act.

In the Proposed Rule, the Secretary instructed the Federal Energy Regulatory Commission (FERC) to impose rules to ensure that reliability and resiliency attributes of certain electric generation units with a 90-day on-site fuel supply are fully compensated for the benefits and services they provide to grid operations.

The Secretary directed FERC to take final action on the Proposed Rule within 60 days of publication or, in the alternative, to issue the rule as an interim final rule immediately, with provision for later modifications after consideration of public comments.

The Proposed Rule cites the retirements of coal and nuclear plants as a potential threat to grid reliability and resilience, and provides for the creation of a “reliability and resiliency rate” that would compensate certain eligible resources for the benefits and services they provide to grid operations, allowing such eligible resources to recover their fully allocated costs and a fair return on equity.

The “reliability and resiliency rate” would be available to eligible resources operating within FERC-approved independent system operators or regional transmission organizations with energy and capacity markets.

The rate would apply only to generators that are not currently subject to cost-of-service regulation by a state or other authority.

On January 8, 2018, FERC unanimously denied the petition and requested additional information from power grid operators thus putting off any new rulemaking by at least two months, dismissing the Secretary’s call to act immediately.

FERC has opened a new proceeding to “take additional steps to explore resilience issues in the [regional transmission organizations and independent system operators].” That docket will aim to develop an understanding of what resilience actually means for the grid and to understand how each grid operator addresses the issue.

Wyoming Land Quality Division Self-Bonding Rules .

On August 20, 2018, the Wyoming Land Quality Division, through the Land Quality Advisory Board, offered for public comment proposed changes to self-bonding rules related to reclamation obligations.

The proposal included requiring that the self-bonding guarantor be the ultimate parent company and that the maximum amount of bonding be limited to 75% of the company’s calculated bond amount.

Additionally, the proposal required the self-bonding party to be of investment grade quality using ratings issued by nationally recognized credit rating services, such as Moody’s Investor Service or Standard and Poor’s Corporation.

This requirement would replace the current qualifying tests using a bonding party’s audited financial statements.

The proposed rule was approved by the Wyoming Land Quality Advisory Board on September 19, 2018, and the Environmental Quality Counsel on February 19, 2019.

It was signed by the governor of Wyoming on May 3, 2019.

The Company currently meets all its bonding obligations in Wyoming through the use of commercial surety bonds.

Under the new rules, the Company does not qualify for self-bonding based on its current credit rating.

Peabody Energy Corporation

2019 Form 10-K

Federal Report on Climate Change .

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While there are no explicit regulatory actions that flow from the issuance of the report, both the legislative and executive branches of government may rely on its conclusions to shape and justify policies and actions going forward.

A Fifth National Climate Assessment is currently in development with an anticipated publication date in 2023.

Peabody Energy Corporation 2020 Form 10-K

Regulatory Matters — Australia

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There is also federal and state legislation to prevent damage to Aboriginal cultural heritage and archaeological sites.

Following the May 2020 destruction of caves at the Juukan Gorge in the Pilbara region of Western Australia by an iron ore mining operation, the Federal Government established a Senate Inquiry.

The Inquiry’s terms of reference include reviewing the effectiveness and adequacy of state and federal laws in relation to Aboriginal and Torres Strait Islander cultural heritage in each of the Australian jurisdictions;

and how these cultural heritage laws might be improved to guarantee the protection of culturally and historically significant sites.

The Inquiry was due to finalize its report by December 9, 2020.

The reporting deadline for the final report has been extended to October 2021 and instead the Joint Standing Committee released its interim report in December 2020.

The interim report focused specifically on Western Australia but the next phase of the Inquiry will be expanded to encompass other Australian states and territories, both with a view to address particular issues and to develop a nationally consistent response to heritage protection.

The Inquiry’s findings and resultant legislation, if any, could potentially impact the Company’s mining permits or existing mine plans in an effort to mitigate against adverse impacts to such sites.

Mining Tenements and Environmental .

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Environmental approvals processes involve complex issues that, on occasion, require lengthy studies and documentation.

Peabody Energy Corporation 2020 Form 10-K

In February 2019, the New South Wales (NSW) Land and Environment Court (LEC) upheld the government’s denial of a planning approval for a non-Peabody coal mining project ( Gloucester Resources Limited v.

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In August 2019, Peabody and Glencore received approval from the NSW Independent Planning Commission (IPC) for the United Wambo project, subject to conditions (Export Conditions) requiring the joint venture to prepare an Export Management Plan setting out protocols for using all reasonable and feasible measures to ensure that any coal extracted from the mine that is to be exported from Australia is only exported to countries that are parties to the Paris Agreement (as defined below) or countries that the NSW Planning Secretary considers to have similar policies for reducing greenhouse gas emissions.

In September 2019, the IPC declined to approve a non-Peabody ‘greenfield’ coal mining project (Bylong) for various reasons, including Scope 3 greenhouse gas emissions.The applicant for that project has applied for the IPC’s decision to be judicially reviewed.

The IPC subsequently approved another non-Peabody coal mining project (Rix’s Creek) without any Export Conditions.

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The NSW government has announced changes to the IPC and planning system process which aims to improve timeframes and efficiencies for project approvals and providing more clarity on the IPC’s role in determining applications including seeking guidance on government policy.

Peabody Energy Corporation

2019 Form 10-K

I n Queensland, laws and regulations related to mining include, but are not limited to, the Mineral Resources Act 1989, Environmental Protection Act 1994 (EP Act), Environmental Protection Regulation 2008, Planning Act 2016, Coal Mining Safety and Health Act 1999, Minerals and Energy Resources (Common Provisions) Act 2014, Explosives Act 1999, Aboriginal Cultural Heritage Act 2003, Water Act 2000, State Development and Public Works Organisation Act 1971, Queensland Heritage Act 1992, Transport Infrastructure Act 1994, Nature Conservation Act 1992, Vegetation Management Act 1999, Biosecurity Act 2014, Land Act 1994, Regional Planning Interests Act 2014, Fisheries Act 1994 and Forestry Act 1959.

In June 2020, the NSW Government released its Strategic Statement on Coal Exploration and Mining in NSW which provides a high level framework for the government's policy approach to the future of the coal sector, as well as details of a streamlined strategic release process.

The strategy identifies some potential areas for possible new coal exploration, areas that are ruled out for coal mining and areas where new coal exploration can only occur adjacent to an existing coal title via the Operational Allocation process.

In December 2020, the NSW Government finalized and published the Guideline for the Competitive Allocation of Coal, which details the process for considering areas for coal exploration and allocating them by public tender.

In Queensland, laws and regulations related to mining include, but are not limited to, the Mineral Resources Act 1989, Environmental Protection Act 1994 (EP Act), Environmental Protection Regulation 2008, Planning Act 2016, Coal Mining Safety and Health Act 1999, Minerals and Energy Resources (Common Provisions) Act 2014, Explosives Act 1999, Aboriginal Cultural Heritage Act 2003, Water Act 2000, State Development and Public Works Organisation Act 1971, Queensland Heritage Act 1992, Transport Infrastructure Act 1994, Nature Conservation Act 1992, Vegetation Management Act 1999, Biosecurity Act 2014, Land Act 1994, Regional Planning Interests Act 2014, Fisheries Act 1994 and Forestry Act 1959.

Under the EP Act, policies have been developed to achieve the objectives of the law and provide guidance on specific areas of the environment, including air, noise, water and waste management.

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In New South Wales, laws and regulations related to mining include, but are not limited to, the Mining Act 1992, Work Health and Safety (Mines) Act 2013, Coal Mine Subsidence Compensation Act 2017, Environmental Planning and Assessment Act 1979 (EPA Act), Environmental Planning and Assessment Regulations 2000, Protection of the Environment Operations Act 1997, Contaminated Land Management Act 1997, Explosives Act 2003, Water Management Act 2000, Water Act 1912, Radiation Control Act 1990, Biodiversity Conservation Act 2016 (BC Act), Heritage Act 1977, Aboriginal Land Rights Act 1983, Crown Land Management Act 2016, Dangerous Goods (Road and Rail Transport) Act 2008, Fisheries Management Act 1994, Forestry Act 2012, Native Title (New South Wales) Act 1994, Biosecurity Act 2015, Roads Act 1993 and National Parks & Wildlife Act 1974.

Peabody Energy Corporation 2020 Form 10-K

Under the EPA Act, environmental planning instruments must be considered when approving a mining project development application.

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We operate in both the Queensland and New South Wales state jurisdictions.

Peabody Energy Corporation

2019 Form 10-K

Our reclamation bonding requirements in Australia were $312.6 million as of December 31, 2020.

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The costs associated with our Australian asset retirement obligations are calculated in accordance with generally accepted accounting principles and were $225.4 million as of December 31, 2020.

The total bonding requirements for our Australian operations differ from the calculated costs associated with the asset retirement obligations because the costs associated with asset retirement obligations are discounted from the end of the mine’s economic life to the balance sheet date in recognition of the economic reality that reclamation is conducted progressively and final reclamation is projected to be a number of years away, whereas the bonding amount represents the cost of reclamation if a mine ceases to operate immediately.

New South Wales Reclamation.

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In support of the MOP process, a reclamation cost estimate is calculated periodically to determine the amount of bond support required to cover the cost of reclamation based on the extent of disturbance during the MOP period.

Under significant reforms proposed by the NSW Resources Regulator in October 2020, all new and existing mines in NSW will be regulated by new standard rehabilitation conditions.

The conditions will apply to all new and existing mining leases and focus on transparently requiring progressive mine site rehabilitation throughout the life of the mine.

The draft Mining Amendment (Standard Conditions of Mining Leases - Rehabilitation) Regulation 2020 has been released for consultation.

The new conditions would apply to all new mining leases and would be introduced into existing mining leases over a 12 to 24 month transition period.

The conditions require (amongst other things) that the leaseholder must rehabilitate land and water in the mining area that is disturbed by activities under the mining lease as soon as reasonably practicable after the disturbance occurs.

The proposed rehabilitation management plan for the mining area which must be prepared for large mines is intended to replace the current approach of preparing a mining operation plan.

Peabody Energy Corporation 2020 Form 10-K

Queensland Reclamation.

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Residual Risks .

On November 19, 2018, the Queensland government released for public consultation a discussion paper on managing ‘residual risks’ of mining activities.

On August 20, 2020, the Environmental Protection and Other Legislation Amendment Act (Queensland) 2020 (EPOLA Act) became law amending the residual risk framework that aims to ensure that any remaining risks on former resource sites are appropriately identified, costed and managed.

On completion of all mining activities, the holder of the EA for the mine can apply to surrender the EA once all conditions, requirements and rehabilitation obligations have been met.

When approving the surrender, the government can request a residual risk payment from the holder of the EA for the mine to cover potential rehabilitation or maintenance costs incurred after the surrender has been accepted.

The discussion paper contemplates two approaches for determining residual risk payments.

It contemplates two approaches for determining residual risk payments.

Depending on the level of risk of a particular site, a cost calculator tool might be used or a panel of appropriately qualified experts might undertake a qualitative and quantitative risk assessment.

Industry and the Company continue to consult with the government on the proposed residual risk payment regime.

Federal Reclamation.

I n February 2017, the Australian Senate established a Committee of Inquiry into the rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities, for example, under the Environment Protection and Biodiversity Conservation Act 1999.

In February 2017, the Australian Senate established a Committee of Inquiry into the rehabilitation of mining and resources projects as it relates to Commonwealth responsibilities, for example, under the Environment Protection and Biodiversity Conservation Act 1999.

The Committee released their report in March 2019.

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It is unclear the extent to which the report will impact policy reform at a federal government level.

Peabody Energy Corporation

2019 Form 10-K

Occupational Health and Safety .

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There are some differences in the application and detail of the laws, and mining operators, directors, officers and certain other employees are all subject to the obligations under this legislation.

Beginning in 2015, a small number of coal mine workers in Queensland and New South Wales were diagnosed with coal workers’ pneumoconiosis (CWP, also known as black lung) following decades of assumed eradication of the disease.

The Queensland government held a Parliamentary inquiry into the re-emergence of CWP in the state, which included public hearings with appearances by representatives of the coal mining industry, coal mine workers, the regulator and others.

The Queensland Parliamentary Committee conducting the inquiry issued its final report on May 29, 2017.

In finding that it is highly unlikely CWP was ever eradicated in Queensland, the Committee made 68 recommendations to ensure the safety and health of coal mine workers.

These include an immediate reduction to the occupational exposure limit for respirable coal dust equivalent to 1.5mg/m 3 for coal dust and 0.05 mg/m 3 for silica and the establishment of a new and independent Mine Safety Authority to be funded by a dedicated proportion of coal and mineral royalties and overseeing the Mines Safety Inspectorate.

The Queensland government has instituted increased reporting requirements for dust monitoring results, broader coal mine worker health assessment requirements and voluntary retirement examinations for coal mine workers to be arranged by the relevant employer and further reform may follow.

Safe Work Australia (SWA) is currently reviewing the Workplace Exposure Standards (WES) for all airborne contaminants including welding fumes and diesel particulate matter and giving priority to the WES for coal dust and silica.

The review is expected to continue until June 2020.

SWA’s draft evaluation reports will include recommendations for exposure limits.

The exposure limits recommended by SWA are based on toxicological information and other monitoring data.

SWA have recommended exposure limits of 1.5mg/m 3 for coal dust and 0.05 mg/m 3 for silica.

Since August 2017, the Workers’ Compensation and Rehabilitation Act 2003 provides for a medical examination process for retired or former coal workers with suspected CWP and an additional lump sum compensation for workers with CWP, and additionally clarifies that a worker with CWP can access further workers’ compensation entitlements if they experience disease progression.

In October 2018 the Queensland government passed the Mines Legislation (Resources Safety) Amendment Act 2018, which introduces significant changes to the Coal Mining Safety and Health Act 1999 concerning, among other things, duties of officers, reporting requirements for coal mine worker diseases, reporting defects and hazards affecting plant and substances, contractor and service provider safety and health management plans, new powers to suspend or cancel an individual’s statutory certificate of competency and increasing penalties and inspector powers.

Following the re-identification of coal workers’ pneumoconiosis and six mining and quarrying fatalities that occurred over a 12-month period, the Resources Safety and Health Queensland Bill 2019 was introduced into Queensland Parliament in September 2019.

The bill establishes Resources Safety and Health Queensland (RSHQ) as a statutory body designed to ensure independence of the mining safety and health regulator.

RSHQ will include inspectorates for coal mines, mineral mines and quarries, explosives and petroleum and gas.

The bill seeks to enhance the role of advisory committees to identify, quantify and prioritize safety and health issues in the mining and quarrying industries.

It also provides for an independent Work Health and Safety Prosecutor to prosecute serious offences under resources safety legislation.

In February 2020, the Queensland government has introduced into Parliament legislation which will introduce the criminal offense of ‘industrial manslaughter’ for executive officers, individuals who are “senior officers” and companies in the mining industry.

Individuals would face a maximum prison sentence of 20 years and companies could be fined up to approximately $13 million Australian dollars.

The legislation has also introduced the requirement for statutory role holders to be employees of the coal mine operator entity with a 12-month transition period.

The bill is currently under review by a Parliamentary Committee.

In September 2020, Safe Work Australia (SWA) published its revised Workplace Exposure Standards (WES) for coal dust and silica based on toxicological information and other monitoring data.

SWA have recommended exposure limits of 1.5 mg/m 3 for coal dust (to apply from October 2022) and 0.05 mg/m 3 for silica (to apply as soon as possible).

In Queensland, the new workplace exposure standard for respirable crystalline silica (eight hour time-weighted average airborne concentration of 0.05 milligrams per cubic meter (mg/m 3 )) took effect from July 1, 2020.

In New South Wales, the new respirable crystalline silica workplace exposure standard of 0.05 mg/m 3 commenced on July 1, 2020.

The respirable coal dust workplace exposure standard of 2.5 mg/m 3 will be reduced to 1.5 mg/m 3 commencing on February 1, 2021 and mines will need to report exceedances of the new exposure standard to the NSW Resources Regulator from this commencement date.

NSW will be the first mining jurisdiction in Australia to implement an exposure standard for diesel particulate matter with the exposure standard of 0.1 mg/m 3 to also commence on February 1, 2021

Peabody Energy Corporation 2020 Form 10-K

On July 1, 2020, the Resources Safety and Health Queensland Act 2020 became effective.

It establishes Resources Safety and Health Queensland (RSHQ) as a statutory body designed to ensure independence of the mining safety and health regulator.

RSHQ includes inspectorates for coal mines, mineral mines and quarries, explosives and petroleum and gas.

The new law seeks to enhance the role of advisory committees to identify, quantify and prioritize safety and health issues in the mining and quarrying industries.

It also provides for an independent Work Health and Safety Prosecutor to prosecute serious offenses under resources safety legislation.

On May 20, 2020, the Queensland Parliament passed a bill into law that introduces the criminal offense of ‘industrial manslaughter’ for executive officers, individuals who are “senior officers” and companies in the mining industry.

Individuals now face a maximum prison sentence of 20 years and companies could be fined up to approximately $13 million Australian dollars.

This new law became effective July 1, 2020.

The bill also introduced the requirement for statutory role holders to be employees of the coal mine operator entity with an 18-month transition period ending November 25, 2021.

Industrial Relations .

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The federal Department of Environment and Energy is responsible for NGER Act-related policy developments and review.

Peabody Energy Corporation

2019 Form 10-K

On July 1, 2016, amendments to the NGER Act implemented the Emissions Reduction Fund Safeguard Mechanism.

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Queensland Royalty .

Royalties are payable to the State of Queensland at a rate of 12.5% on coal prices over $100 Australian dollars per tonne and up to $150 Australian dollars per tonne and 15.0% on pricing over $150 Australian dollars per tonne.

The rate is 7.0% for coal sold below $100 Australian dollars per tonne.

The periodic impact of these royalty rates is dependent upon the volume of tonnes produced at each of our Queensland mining locations and coal prices received for those tonnes.

The Queensland Office of State Revenue issues determinations setting out its interpretation of the laws that impose royalties and provide guidance on how royalty rates should be calculated.

As part of the Queensland Government’s 2019-20 Budget, the Government committed to freeze royalty rates on coal and minerals for three years, provided companies voluntarily contribute to a Resource Community Infrastructure Fund (the Fund) over this three-year period.

The Government contributes $30 million Australian dollars towards the Fund, with companies voluntarily contributing $70 million Australian dollars.

Peabody’s contribution to the Fund was approximately $713,000 Australian dollars for the 2019-20 financial year and is expected to decrease in years two and three based on an expected reduction in production at our Queensland mines.

New South Wales Royalty .

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In November 2017, the New South Wales government established an independent expert panel (Panel) to advise the Department of Planning, Industry and Environment (DPIE) on the impact of underground mining activities in Sydney’s water catchment areas, including at our Metropolitan Mine.

The Panel issued an initial report to DPIE in November 2018, which was publicly released in December 2018 and only concerned mining activities at two mines, our Metropolitan Mine and a competitor’s Dendrobium Mine.

After consultation with stakeholders, including Peabody, a final report was released in October 2019.

The final report updates and finalizes the initial report and also makes findings and recommendations concerning mining activities and effects across the catchment as a whole.

The Panel’s reports acknowledge the major effort at the Metropolitan and Dendrobium Mines over the last decade to employ best practice modeling and assessment methods undertaken by suitable specialists, with expert peer review while recommending continued rigorous monitoring and impact assessment in order to build on the knowledge base regarding mining-induced subsidence and its impacts on groundwater and surface water.

The reports endorse the government taking an incremental approach to mining approvals that provides for considering existing and emerging information and knowledge gaps.

The Panel concluded in the final report that the average daily water inflow over the last three years at the Metropolitan Mine is generally less than 0.2 megaliters per day and shows no evidence of connected fracture regime to surface or correlation with rainfall.

It also concluded that the potential for water to be diverted out of Woronora Reservoir and into other catchments through valley closure shear planes and geological structures will require careful assessment in the future because it is planned that most of the remaining longwall panels in the approved mining area will pass beneath the reservoir.

A range of matters remain to be considered by the Panel, including the cumulative impacts of flow losses and the relative significance of these for water supplies as well as the practicalities associated with establishing a robust regional water balance model.

The DPIE will now consider the recommendations in the Panel’s final report and has said that in the meantime no new development applications for mining in the catchment will be determined.

We do not currently have any such applications awaiting determination.

The latest extraction plans for the Metropolitan Mine are progressing on an incremental basis and we continue to conduct robust monitoring, data collection and reporting and have been actively consulting with the government on Metropolitan’s approval processes and mine design to ensure that operational impacts are appropriately managed and minimized as far as possible.

Peabody Energy Corporation

2019 Form 10-K

The Panel issued its final report in October 2019.

The final report makes findings and recommendations concerning mining activities and effects across the catchment as a whole.

The DPIE considered the recommendations in the Panel’s final report and in April 2020 announced that it had accepted all 50 recommendations in the Panel’s report, and that it has established an interagency taskforce to implement a detailed action plan during 2020.

The action plan includes:

ensuring there is a net gain for the metropolitan water supply by requiring more offsetting from mining companies;

establishing a new independent expert panel to advise on future mining applications in the catchment;

strengthening surface and groundwater monitoring;

improving access to and transparency of environmental data;

adopting a more stringent approach to the assessment and conditioning of future mining proposals to minimize subsidence impacts;

reviewing and updating current and potential future water losses from mining in line with the best available science;

introducing a licensing regime to properly account for any water losses;

and undertaking further research into mine closure planning to reduce potential long-term impacts.

Peabody Energy Corporation 2020 Form 10-K

Global Climate

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In the absence of new U.S.

federal legislation, the EPA is undertaking steps to regulate greenhouse gas emissions pursuant to the CAA.

federal legislation, the EPA has taken steps to regulate greenhouse gas emissions pursuant to the CAA.

In response to the 2007 U.S.

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Following the effectiveness of the ACE Rule, the case challenging the CPP in federal court was dismissed as being moot.

The ACE Rule is being challenged in the D.C.

Circuit Court of Appeals and its ultimate impact will depend on state implementation plan requirements and the outcome of associated legal challenges.

On January 19, 2021, the D.C.

Circuit Court of Appeals held that the ACE Rule and its repeal of the CPP were to be vacated and remanded to the EPA.

It also vacated amendments to the implementing regulations that extended the compliance timeline.

At the same time, a number of states in the U.S.

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Some states have initiated public utility proceedings that may establish values for carbon emissions.

Increasingly, both foreign and domestic banks, insurance companies and large investors are curtailing or ending their financial relationships with fossil fuel-related companies.

This has had adverse impacts on the liquidity and operations of coal producers.

We participated in the Department of Energy’s Voluntary Reporting of Greenhouse Gases Program until its suspension in May 2011, and we regularly disclose in our annual Environmental, Social and Governance Report the quantity of emissions per ton of coal produced by us in the U.S.

The vast majority of our emissions are generated by the operation of heavy machinery to extract and transport material at our mines and fugitive emissions from the extraction of coal.

In 2013, the U.S.

and a number of international development banks, including the World Bank, the European Investment Bank and the European Bank for Reconstruction and Development, announced that they would no longer provide financing for the development of new coal-fueled power plants or would do so only in narrowly defined circumstances.

Other international development banks, such as the Asian Development Bank and the Japanese Bank for International Cooperation, have continued to provide such financing.

Other banks (such as BNP Paribas and HSBC) have pledged to end financing of certain fossil fuel projects and companies.

Some insurance companies (such as Zurich and Swiss Re) have announced that they will no longer insure coal operations and companies.

And some large investors (including Lloyd’s of London) have announced that they plan to divest coal stocks from their investment holdings.

Peabody Energy Corporation

2019 Form 10-K

Peabody Energy Corporation 2020 Form 10-K

The Kyoto Protocol, adopted in December 1997 by the signatories to the 1992 United Nations Framework Convention on Climate Change (UNFCCC), established a binding set of greenhouse gas emission targets for developed nations.

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The agreement was entered into force on November 4, 2016 after ratification and execution by more than 55 countries, including Australia, that account for at least 55% of global greenhouse gas emissions.

has begun the process of withdrawing from the Paris Agreement, which cannot be completed until 2020 under the terms of the agreement.

On January 20, 2021, the U.S.

reentered the Paris Agreement by accepting the agreement and all of its articles and clauses, after having announced its withdrawal from the agreement in November 2019.

In October 2017, the Australian Federal Government released a plan aimed at delivering an affordable and reliable energy system that meets Australia’s international commitments to emissions reduction.

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Investor Relations.

Peabody Energy Corporation 2020 Form 10-K

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business