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Item 2. Properties

2022-02-18 compared with 2021-02-23 · 491 added, 284 removed, 71 unchanged (92% of the section changed)

Coal Reserves

We controlled an estimated 3.0 billion tons of proven and probable coal reserves as of December 31, 2020.

An estimated 2.6 billion tons of our attributable proven and probable coal reserves are in the U.S., with the remainder in Australia.

Approximately 2% of our U.S.

proven and probable coal reserves, or 52 million tons, are metallurgical coking coal.

The remainder of our U.S.

coal reserves consists of thermal coal.

Approximately 56% of our Australian proven and probable coal reserves, or 243 million tons, are metallurgical coal, comprised of approximately 121 million and 122 million tons of coking coal and low-volatile pulverized coal injection (LV PCI) coals, respectively.

The remainder of our Australian coal reserves consists of thermal coal.

We own approximately 6% of these reserves and leased property comprises the remaining 94%.

Approximately 88% of our reserves, or 2.7 billion tons, are compliance coal and 12% are non-compliance coal (assuming application of the U.S.

industry standard definition of compliance coal to all of our reserves).

Compliance coal is defined by Phase II of the CAA as coal having sulfur dioxide content of 1.2 pounds or less per million Btu.

Electricity generators are able to use coal that exceeds these specifications by using emissions reduction technology, using emission allowance credits or blending higher sulfur coal with lower sulfur coal.

Below is a table summarizing the locations and proven and probable coal reserves of our major mining segments.

Proven and Probable

Reserves as of

December 31, 2020 (1)

Mining Segment Locations

(Tons in millions)

Seaborne Thermal Mining New South Wales — 211 211

Seaborne Metallurgical Mining Queensland, New South Wales and Alabama — 275 275

Powder River Basin Mining Wyoming — 2,223 2,223

Thermal Mining Illinois, Indiana, Kentucky, New Mexico and Colorado 190 149 339

Total Proven and Probable Coal Reserves

190 2,858 3,048

Total United States

190 2,424 2,614

Total Australia

Total Proven and Probable Coal Reserves

190 2,858 3,048

(1) Estimated proven and probable coal reserves have been adjusted to account for estimated process dilutions and losses during mining and processing involved in producing a saleable coal product.

Reserves are defined by SEC Industry Guide 7 as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.

Proven and probable coal reserves are defined by SEC Industry Guide 7 as follows:

• Proven (Measured) Reserves — Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes;

grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.

• Probable (Indicated) Reserves — Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced.

The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.

Our estimates of proven and probable coal reserves are established within these guidelines.

Estimates within the proven category have the highest degree of assurance, while estimates within the probable category have only a moderate degree of geologic assurance.

Further exploration is necessary to place probable reserves into the proven reserve category.

Our active properties generally have a much higher degree of reliability because of increased drilling density.

Coal Reserves and Resources

Information concerning the Company’s mining properties in this Annual Report on Form 10-K has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, which first became applicable to the Company for the year ended December 31, 2021.

These requirements differ significantly from the previously applicable disclosure requirements of SEC Industry Guide 7.

Among other differences, subpart 1300 of Regulation S-K requires disclosure of mineral resources, in addition to mineral reserves, as of December 31, 2021, both in the aggregate and for each of our individually material mining properties.

The Company’s coal reserves and resources are estimated by individuals deemed Qualified Persons (QP) according to the standards set forth in subpart 1300 of Regulation S-K.

Mineral resources and reserves are defined in subpart 1300 of Regulation S-K as follows:

• Mineral resource.

A concentration or occurrence of material of economic interest in or on the earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction.

A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable.

It is not merely an inventory of all mineralization drilled or sampled.

• Mineral reserve.

An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a QP, can be the basis of an economically viable project.

More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.

Under subpart 1300 of Regulation S-K, mineral resources may not be classified as mineral reserves unless the determination has been made by a QP that such mineral resources can be the basis of an economically viable project.

The conversion of reported mineral resources to mineral reserves should not be assumed.

Coal resources are estimated from geological models constructed from an extensive historical database of drill holes and the Company’s ongoing drilling program.

Data from individual drill holes is compiled in a computerized drill-hole database, including the depth, thickness and, where core drilling is used, the quality of the coal observed.

For coal deposits, the density of a drill pattern is one of the important factors which determine whether the related coal will be classified as measured, indicated, or inferred.

Mineral resource classifications are differentiated under subpart 1300 of Regulation S-K, in part, as follows:

• Measured resource .

That part of a mineral resource with the highest level of geological confidence;

quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling.

The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit.

• Indicated resource.

That part of a mineral resource with a level of geological confidence between that of measured and inferred resources;

quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling.

The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

• Inferred resource .

That part of a mineral resource with the lowest level of geological confidence;

quantity and grade or quality are estimated on the basis of limited geological evidence and sampling.

The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability.

Peabody Energy Corporation 2021 Form 10-K

Our guidelines for geologic assurance surrounding estimated proven and probable U.S.

and Australian coal reserves generally follow the respective industry-accepted practices of those countries.

In the U.S., our estimated proven coal reserves lie within one-quarter mile of a valid point of measure or point of observation, such as exploratory drill holes or previously mined areas, while our estimated probable coal reserves may lie more than one-quarter mile, but less than three-quarters of a mile, from a point of thickness measurement.

In Australia, our estimated proven coal reserves generally lie within 250 meters of a point of observation, while our estimated probable coal reserves may lie more than 250 meters, but less than 500 meters, from a point of observation.

For some of our Australian coal reserves, the distance between points of observation is determined by a geostatistical study.

The preparation of our coal reserve estimates is completed in accordance with our prescribed internal control procedures, which include verification of input data into a coal reserve forecasting and economic evaluation software system, as well as multi-functional management review.

Our reserve estimates are prepared by our staff of experienced geologists and engineers.

Our corporate Technical Services group is responsible for tracking changes in reserve estimates, supervising our other geologists and coordinating periodic third-party reviews of our reserve estimates by qualified mining consultants.

Our coal reserve estimates are predicated on information obtained from an extensive historical database of drill holes and information obtained from our ongoing drilling program.

We compile data from individual drill holes in a computerized drill-hole database from which the depth, thickness and, where core drilling is used, the quality of the coal is determined.

The density of a drill pattern determines whether the related coal reserves will be classified as proven or probable.

Our coal reserve estimates are then input into our computerized land management system, which overlays that geological data with data on ownership or control of the mineral and surface interests to determine the extent of our attributable coal reserves in a given area.

Our land management system contains reserve information, including the quantity and quality (where available) of reserves, as well as production data, surface and coal ownership, lease payments and other information relating to our coal reserves and land holdings.

We periodically update our coal reserve estimates to reflect production of coal from those reserves and new drilling or other data received.

Accordingly, our coal reserve estimates will change from time to time to reflect the effects of our mining activities, analysis of new engineering and geological data, changes in coal reserve holdings, modification of mining methods and other factors.

Our estimate of the economic recoverability of our coal reserves is generally based upon a comparison of unassigned reserves to assigned reserves currently in production in the same geologic setting to determine an estimated mining cost.

These estimated mining costs are compared to expected market prices for the quality of coal expected to be mined and take into consideration typical contractual sales agreements for the region and product.

Where possible, we also review coal production by competitors in similar mining areas.

Only coal reserves expected to be mined economically are included in our reserve estimates.

Finally, our coal reserve estimates consider dilutions and losses during mining and processing for recoverability factors to estimate a saleable product.

Factors impacting our assessment include geological conditions, production expectations for certain areas, the effects of regulation and taxes by governmental agencies, future price and operating cost assumptions and adverse changes in market conditions and mine closure activities.

The estimates are also impacted by decreases resulting from current year production and increases resulting from information obtained from additional drilling.

Our estimation as of December 31, 2020 reflected a net reduction compared to the prior year of 1.0 billion tons of coal reserves.

The decrease was driven by production, changes to our estimates of economic recoverability to reflect market conditions, mine plan changes and new drilling.

We periodically engage independent mining and geological consultants and consider their input regarding the procedures used by us to prepare our internal estimates of coal reserves, selected property reserve estimates and tabulation of reserve groups according to standard classifications of reliability.

Our December 31, 2020 reserve estimates for the Gateway North Mine and El Segundo Mine in the U.S.

were audited by Weir International, Inc., independent mining and geological consulting firm, which included a review of the data, procedures and parameters employed by us in developing our reserve estimates.

The audits found that the reserve estimates for the areas were (1) well documented, clearly and concisely reported and (2) prepared consistent with standard industry and geological practice, and in accordance with United States Geological Survey Circular 891 requirements and SEC Industry Guide 7 guidelines.

We plan to complete additional audits of our reserve estimates on a cyclical basis for each of our major operating regions.

With respect to the accuracy of our coal reserve estimates, our experience is that recovered reserves are within plus or minus 10% of our proven and probable estimates, on average, and our probable estimates are generally within the same statistical degree of accuracy when the necessary drilling is completed to move reserves from the probable to the proven classification.

The geological confidence surrounding resource classification is first determined by a drill hole spacing analysis performed by a QP using geostatistical techniques.

A QP may also use qualitative analysis to determine the geologic confidence based on historical experience with a specific coal deposit.

Resources are further evaluated using a set of structure and quality parameters to determine the reasonable prospects for economic extraction.

The structure parameters include coal thickness, depth, dipping angle, and strip ratio, among others.

The quality parameters include ash and sulfur content, yield, and heat value, among others.

Each coal deposit is different with respect to geology, potential mining methods, logistics, and markets.

The cut-off criteria of those structure and quality parameters are different for each deposit, and a QP generally forms those criteria based upon experience with the Company’s existing mining operations or adjacent operations with similar geological conditions.

Other factors, such as coal control, or surface and underground obstacles are also considered in connection with resource estimates.

The reclassification of reported mineral resources from lower to higher levels of geological confidence should not be assumed.

The economically mineable part of a measured coal resource is considered a proven coal reserve and has the highest degree of assurance of economic viability.

The economically mineable part of indicated, and sometimes measured, coal resources are considered probable coal reserves and have a moderate degree of assurance of economic viability.

For each mine or future mine, the Company develops Life-of-Mine (LOM) plans which employ a market-driven, risk-adjusted capital allocation process to guide long-term mine planning of active operations and development projects.

QPs rely on LOM planning as an integral process for coal reserve and resource estimates.

The LOM plans consider dilution and losses during mining and processing as recoverability factors to estimate saleable coal.

The LOM plans are developed in consideration of market demands and operational constraints.

The LOM plans project, among other things, annual quantities and qualities for each coal product.

The saleable product mix for a mine may include multiple thermal and metallurgical products with different targeted qualities and sales prices.

The expected volumes for each mine and product, as well as annual pricing forecasts for each product, developed as described below, and related cost forecasts, developed as described below, are then evaluated to determine the economically viable coal in the LOM plans.

Other factors impacting the assessment include geological conditions, production expectations for certain areas, the effects of regulation and taxes by governmental agencies, future price and operating cost assumptions and adverse changes in market conditions and mine closure activities.

The Company periodically reviews and updates coal reserve and resource estimates to reflect the production of coal, new drill hole data, the effects of mining activities, analysis of new engineering and geological data, changes in property control, modification of mining methods and other factors.

Mineral Rights

The Company controls coal rights through direct ownership and numerous lease agreements with government or private parties.

The majority of our coal reserves and resources are controlled through lease agreements with the U.S.

and Australian governments.

In addition, surface rights are required to conduct certain mining-related activities.

The Company holds the majority of the required surface rights to meet mid- to long-term production requirements.

The additional surface rights to meet long-term production requirements are expected to be acquired as needed.

The Company is party to numerous U.S.

federal coal leases that are administered by the U.S.

Department of the Interior under the Federal Coal Leasing Amendments Act of 1976.

These leases cover Peabody’s principal reserves in the Powder River Basin and other reserves and resources in Alabama, Colorado and New Mexico.

Each of these leases continues indefinitely, provided there is diligent development of the property and continued operation of the related mine or mines.

Bureau of Land Management (BLM) has asserted the right to adjust the terms and conditions of these leases, including rent and royalties, after the first 20 years of their term and at 10-year intervals thereafter.

Annual rents on surface land under federal coal leases are now set at $3.00 per acre.

Production royalties on federal leases are set by statute at 12.5% of the gross proceeds of coal mined and sold for surface-mined coal and 8% for underground-mined coal.

federal government limits by statute the amount of federal land that may be leased by any company and its affiliates at any time to 75,000 acres in any one state and 150,000 acres nationwide.

As of December 31, 2021, the Company leased 1,610 acres of federal land in Alabama, 3,480 acres in Colorado, 282 acres in New Mexico and 38,915 acres in Wyoming, for a total of 44,287 acres nationwide subject to those limitations.

The Company also lease coal-mining properties from various state governments in the U.S.

coal leases normally have terms of between 10 and 20 years and usually give the Company the right to renew the lease for a stated period or to maintain the lease in force until the exhaustion of mineable and merchantable coal contained on the relevant site.

These private U.S.

leases provide for royalties to be paid to the lessor either as a fixed amount per ton or as a percentage of the sales price.

Many private U.S.

leases also require payment of a lease bonus or minimum royalty, payable either at the time of execution of the lease or in periodic installments.

The terms of private U.S.

leases are normally extended by active production at or near the end of the lease term.

leases containing undeveloped coal properties may expire or these leases may be renewed periodically.

Peabody Energy Corporation 2021 Form 10-K

For each mine or future mine, we employ a market-driven, risk adjusted capital allocation process to guide long-term mine planning of active operations and development projects for economically mineable coal.

We refer to this process as Life-of-Mine (LOM) planning.

The LOM plan projects, among other things, annual quantities and qualities for each coal product.

The saleable product mix for a mine may include multiple thermal and metallurgical products with different targeted qualities.

The pricing information used to establish our reserves includes internal, proprietary price forecasts and existing contract economics, in each case on a mine-by-mine and product-by-product basis.

In general, our price forecasts are based on a thorough analytical process utilizing detailed supply and demand models, global economic indicators, projected foreign exchange rates, analyses of price relationships among various commodities, competing fuels analyses, projected steel demand, analyses of supplier costs and other variables.

Price forecasts, supply and demand models and other key assumptions and analyses are stress tested against independent third-party research not commissioned by us to confirm the conclusions reached through our analytical processes, and our price forecasts fall within the ranges of the projections included in this third-party research.

Mining and exploration in Australia are generally carried out under leases or licenses granted by state governments.

Mining leases are typically for an initial term of up to 21 years (but which may be renewed) and contain conditions relating to such matters as minimum annual expenditures, restoration and rehabilitation.

Royalties are paid to the state government as a percentage of the sales price.

Generally, landowners do not own the mineral rights or have the ability to grant rights to mine those minerals.

These rights are retained by state governments.

Compensation is payable to landowners for loss of access to the land, and the amount of compensation can be determined by agreement or court process.

Surface rights are typically acquired directly from landowners through agreement or court determination, subject to some exceptions.

The pricing information used in support of the Company’s reserve and resource estimates include internal, proprietary price forecasts and existing contract economics, in each case on a mine-by-mine and product-by-product basis.

In general, price forecasts are based on a thorough analytical process utilizing detailed supply and demand models, global economic indicators, projected foreign exchange rates, analyses of price relationships among various commodities, competing fuels analyses, projected supply and demand fundamentals for steel production and electricity generation, analyses of supplier costs and other variables.

Price forecasts, supply and demand models and other key assumptions and analyses are stress-tested against independent third-party research (not commissioned by the Company) to confirm the conclusions reached through analytical processes, and that price forecasts fall within the ranges of the projections included in this third-party research.

The development of the analyses, price forecasts, supply and demand models and related assumptions are subject to multiple levels of management review.

Below is a description of some of the specific factors that we evaluate in developing our price forecasts for thermal and metallurgical coal products on a mine-by-mine and product-by-product basis.

Differences between the assumptions and analyses included in our price forecasts and realized factors could cause actual pricing to differ from our forecasts.

Below is a description of some of the specific factors that the Company evaluates in developing price forecasts for thermal and metallurgical coal products on a mine-by-mine and product-by-product basis.

Differences between the assumptions and analyses included in the price forecasts and realized factors could cause actual pricing to differ from the forecasts.

Several factors can influence thermal coal supply and demand and pricing.

Demand is sensitive to total electric power generation volumes, which are determined in part by the impact of weather on heating and cooling demand, inter-fuel competition in the electric power generation mix (such as from natural gas and renewable sources), changes in capacity (additions and retirements), competition from other producers, coal stockpiles and policy and regulations.

Supply considerations impacting pricing include reserve positions, mining methods, strip ratios, production costs and capacity and the cost of new supply (greenfield developments or extensions at existing mines).

Supply considerations impacting pricing include coal reserve and resource positions, mining methods, strip ratios, production costs and capacity and the cost of new supply (greenfield developments or extensions at existing mines).

In the United States, natural gas is the most significant substitute for thermal coal for electricity generation and can be one of the largest drivers of shifts in supply and demand and pricing.

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

Competition from other types of coal is also a key price consideration and can be impacted by coal quality and characteristics, delivered energy cost (including transportation costs), customer service and support and reliability of supply.

Competition from other types of coal is also a key price consideration and can be impacted by the 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, as well as country-specific policies restricting or promoting domestic supply.

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, is also an important price consideration.

In addition to the factors noted above, the prices which may be obtained at each individual mine or future mine can be impacted by factors such as (i) the mine’s location, which impacts the total delivered energy costs to its customers, (ii) quality characteristics, particularly if they are unique relative to competing mines, (iii) assumed transportation costs and (iv) other mine costs that are contractually passed on to customers in certain commercial relationships.

In addition to the factors noted above, the prices which may be obtained at each mine or future mine can be impacted by factors such as (i) the mine’s location, which impacts the total delivered energy costs to its customers, (ii) quality characteristics, particularly if they are unique relative to competing mines, (iii) assumed transportation costs and (iv) other mine costs that are contractually passed on to customers in certain commercial relationships.

Peabody Energy Corporation 2021 Form 10-K

The cost estimates we use to establish our reserves are generally estimated according to internal processes that project future costs based on historical costs and expected trends.

The cost estimates used to establish LOM plans are generally made according to internal processes that project future costs based on historical costs and expected trends.

The estimated costs normally include mining, processing, transportation, royalty, add-on tax and other mining-related costs.

Our estimated mining and processing costs reflect projected changes in prices of consumable commodities (mainly diesel fuel, explosives and steel), labor costs, geological and mining conditions, targeted product qualities and other mining-related costs.

Estimated mining and processing costs reflect projected changes in prices of consumable commodities (mainly diesel fuel, explosives and steel), labor costs, geological and mining conditions, targeted product qualities and other mining-related costs.

Estimates for other sales-related costs (mainly transportation, royalty and add-on tax) are based on contractual prices or fixed rates.

Specific factors that may impact the cost at our various operations include:

Specific factors that may impact the Company’s operating costs include:

• Geological settings .

The geological characteristics of each mine are among the most important factors that determine the mining cost.

Our geology department conducts the exploration program and provides geological models for the LOM process.

Company geologists conduct the exploration program and provide geological models for the LOM process.

Coal seam depth, thickness, dipping angle, partings and quality constrain the available mining methods and size of operations.

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• Scale of operations and the equipment sizes .

For surface mines, our dragline systems generally have a lower unit cost than truck-and-shovel systems for overburden removal.

The longwall operations generally are more cost effective than room-and-pillar operations for underground mines.

For surface mines, dragline systems generally have a lower unit cost than truck-and-shovel systems for overburden removal.

Longwall operations are generally more cost-effective than room-and-pillar operations for underground mines.

• Commodity prices .

For surface mines, the costs of diesel fuel and explosives are major components of the total mining cost.

For underground mines, the steel used for roof bolts represents a significant cost.

Forecasted commodity prices are used to project those costs in the financial models we use to establish our reserves.

For underground mines, the steel used for roof control represents a significant cost.

Forecasted commodity prices are used to project those costs in the financial models used to establish reserve and resource estimates.

• Target product quality .

By targeting a premium quality product, our mining and processing processes may experience more coal losses.

By targeting a premium quality product, mining and processing processes may experience more coal losses.

By lowering product quality the coal losses can be minimized and therefore a lower cost per ton can be achieved.

In our mine plans, the product qualities are estimated to correspond to existing contracts and forecasted market demands.

In the Company’s LOM plans, product qualities are estimated to correspond to existing contracts and forecasted market demands.

• Transportation costs .

Transportation costs vary by region.

Most of our U.S.

Most of the Company’s U.S.

thermal operations sell coal at mine loadouts.

Therefore, no transportation expenses are included in our U.S.

Therefore, no transportation expenses are included in U.S.

thermal cost estimates.

Our seaborne operations typically sell coal at designated ports.

The estimated costs for our seaborne operations include rail and barge transportation and related fees at ports.

The Company’s seaborne operations typically sell coal at designated ports.

The estimated costs for seaborne operations include rail and barge transportation and related fees at ports.

• Royalty costs .

Our royalty costs are based upon contractual agreements for the coal leased from governments or private owners.

Royalty costs are based upon contractual agreements for the coal leased from governments or private owners.

The royalty rates for coal leased from governments differ by country and, in some cases, by mining method.

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• Exchange rates .

Costs related to our Australian production are predominantly denominated in Australian dollars, while the Australian coal that we export is sold in U.S.

Costs related to the Company’s Australian production are predominantly denominated in Australian dollars, while the Australian coal exported is sold in U.S.

As a result, Australian/U.S.

1 unchanged sentence

dollar cost of Australian production.

Based on our mine-by-mine and product-by-product evaluations of the estimated prices for our coal, and the costs and expenses of mining and selling our coal, we have concluded our reserves were economically recoverable as of December 31, 2020.

On October 31, 2018, the SEC voted to adopt amendments to modernize the property disclosure requirements for mining registrants and related guidance under the Securities Act of 1933 and the Securities Exchange Act of 1934.

The final rules provide a three-year transition period, thus, we will be required to begin to comply with the new rules for the fiscal year beginning on January 1, 2021 (reported in the Annual Report on Form 10-K for the year ended December 31, 2021).

We are in the process of assessing the impact the new rules will have on our disclosures.

We have numerous U.S.

federal coal leases that are administered by the U.S.

Department of the Interior under the Federal Coal Leasing Amendments Act of 1976.

These leases cover our principal reserves in the Powder River Basin and other reserves in Alabama, Colorado and New Mexico.

Each of these leases continues indefinitely, provided there is diligent development of the property and continued operation of the related mine or mines.

Annual rents on surface land under our federal coal leases are now set at $3.00 per acre.

Production royalties on federal leases are set by statute at 12.5% of the gross proceeds of coal mined and sold for surface-mined coal and 8% for underground-mined coal.

federal government limits by statute the amount of federal land that may be leased by any company and its affiliates at any time to 75,000 acres in any one state and 150,000 acres nationwide.

As of December 31, 2020, we leased 1,610 acres of federal land in Alabama, 3,480 acres in Colorado, 640 acres in New Mexico and 38,915 acres in Wyoming, for a total of 44,645 acres nationwide subject to those limitations.

Peabody Energy Corporation 2020 Form 10-K

Similar provisions govern three coal leases with the Navajo and Hopi Indian tribes.

These leases cover coal contained in 64,783 acres of land in northern Arizona lying within the boundaries of the Navajo Nation and Hopi Indian reservations.

We also lease coal-mining properties from various state governments in the U.S.

coal leases normally have terms of between 10 and 20 years and usually give us the right to renew the lease for a stated period or to maintain the lease in force until the exhaustion of mineable and merchantable coal contained on the relevant site.

These private U.S.

leases provide for royalties to be paid to the lessor either as a fixed amount per ton or as a percentage of the sales price.

leases also require payment of a lease bonus or minimum royalty, payable either at the time of execution of the lease or in periodic installments.

The terms of our private U.S.

leases are normally extended by active production at or near the end of the lease term.

leases containing undeveloped reserves may expire or these leases may be renewed periodically.

Mining and exploration in Australia is generally carried out under leases or licenses granted by state governments.

Royalties are paid to the state government as a percentage of the sales price.

Generally, landowners do not own the mineral rights or have the ability to grant rights to mine those minerals.

These rights are retained by state governments.

Compensation is payable to landowners for loss of access to the land, and the amount of compensation can be determined by agreement or court process.

Surface rights are typically acquired directly from landowners through agreement or court determination, subject to some exceptions.

Consistent with industry practice, we conduct only limited investigation of title to our coal properties prior to leasing.

Title to lands and reserves of the lessors or grantors and the boundaries of our leased properties are not completely verified until we prepare to mine those reserves.

Summary of Coal Reserves and Resources

Peabody controlled an estimated 2.5 billion tons of coal reserves and 2.4 billion tons of coal resources as of December 31, 2021.

Approximately 95% of the Company’s coal reserves and 98% of the Company’s coal resources are held under lease, and the remainder is held through fee ownership.

The following tables summarize the Company’s estimated coal reserves and resources as of December 31, 2021.

The quantity of the coal resources is estimated on an in situ basis as attributable to Peabody.

Coal resources are reported exclusive of coal reserves.

The quantity of the coal reserves is estimated on a saleable product basis as attributable to Peabody.

The coal reserves and resources are reported on selected key quality parameters and on different moisture bases generally referenced by sales contracts for each mining property.

Peabody Energy Corporation 2021 Form 10-K

The following charts provide a summary, by mining complex, of production (in descending order by mining segment) for the years ended December 31, 2020, 2019 and 2018, tonnage of coal reserves that are assigned to our active operating mines, our property interest in those reserves and other characteristics of the facilities.

SUMMARY OF COAL PRODUCTION AND SULFUR CONTENT OF ASSIGNED RESERVES

SUMMARY COAL RESERVES AT END OF THE FISCAL YEAR ENDED DECEMBER 31, 2021 (1)

(Tons in millions)

Sulfur Content of Assigned Reserves as of December 31, 2020 (1)

>1.2 to 2.5 lbs.

Production Sulfur Sulfur Sulfur Received

Year Ended December 31, Type of Dioxide per Dioxide per Dioxide per Btu per

Segment/Mining Complex 2020 2019 2018 Coal Million Btu Million Btu Million Btu pound (2)

Mining Coal Proven Coal Reserves Probable Coal Reserves Total Coal Reserves Interest

Segment / Mining Complex Country State Stage Method Type Amount Quality Amount Quality Amount Quality (10)

Seaborne Thermal Mining:

Wilpinjong 14.2 14.1 14.1 T 93 — — 10,000

5.5 5.6 5.2 T/C 118 — — 11,300

Tons %Ash %Sulfur Kcal/kg (6)

Wilpinjong AUS NSW P S T 71 24.3 0.5 5,940 5 29.7 0.4 5,478 76 24.7 0.5 5,910 100%

Wambo Opencut (9)

AUS NSW P S T 28 10.8 0.3 7,098 2 11.3 0.3 7,055 30 10.8 0.3 7,095 50%

Wambo Underground AUS NSW P U T 2 12.2 0.3 6,802 - - - - 2 12.2 0.3 6,802 100%

South Wambo AUS NSW E U T/C - - - - 74 9.8 0.3 7,034 74 9.8 0.3 7,034 100%

Total 101 81 182

Seaborne Metallurgical Mining:

Coppabella 2.2 2.4 2.7 P 22 — — 12,600

Moorvale 1.2 1.7 2.1 C/P/T 6 — — 12,500

Metropolitan 1.0 1.5 1.7 C/P/T 16 — — 12,600

Shoal Creek 0.6 1.9 0.2 C 52 — — 12,700

Millennium (4)

0.1 0.6 1.9 C/P — — — —

North Goonyella — — 1.4 C 69 — — 12,700

Tons %Ash %Sulfur VM% (7)

Shoal Creek USA AL P U C 16 10.2 0.7 30.4 2 10.2 0.7 30.3 18 10.2 0.7 30.3 100%

Coppabella AUS QLD P S P 8 8.9 0.2 10.3 4 9.4 0.2 8.6 12 9.1 0.2 9.7 73.3%

Moorvale AUS QLD P S C/P/T 2 11.8 0.3 16.2 - - - - 2 11.8 0.3 16.2 73.3%

Metropolitan AUS NSW P U C/T 4 14.0 0.4 18.6 12 14.6 0.4 18.6 16 14.5 0.4 18.6 100%

North Goonyella AUS QLD I U C 46 7.4 0.5 21.4 24 7.5 0.5 21.1 70 7.4 0.5 21.3 100%

Moorvale South AUS QLD D S C/P 4 11.0 0.4 18.4 2 9.7 0.4 17.4 6 10.6 0.4 18.1 73.3%

Middlemount (9)

— — — C/P 20 — — 12,400

AUS QLD P S C/P 28 10.3 0.4 18.0 9 10.3 0.4 18.0 37 10.3 0.4 18.0 50.0%

Total 108 53 161

Powder River Basin Mining:

North Antelope Rochelle 66.1 85.3 98.3 T 1,546 — — 8,800

Caballo 11.6 12.6 11.3 T 435 6 — 8,400

Rawhide 9.5 10.1 9.5 T 192 44 — 8,300

Tons %Ash %Sulfur Btu (8)

North Antelope Rochelle USA WY P S T 1,378 4.4 0.2 8,889 106 4.4 0.2 8,965 1,484 4.4 0.2 8,895 100%

Caballo USA WY P S T 266 5.1 0.3 8,504 52 5.4 0.4 8,205 318 5.1 0.3 8,455 100%

Rawhide USA WY P S T 124 5.6 0.4 8,274 3 5.5 0.4 8,359 127 5.6 0.4 8,269 100%

Total 1,768 161 1,929

Thermal Mining:

Bear Run 5.2 6.8 6.9 T 4 25 201 10,900

El Segundo/Lee Ranch 4.6 5.5 5.5 T 1 19 4 9,100

Wild Boar 2.0 2.5 2.7 T — — 27 11,100

Gateway North 1.8 3.0 3.1 T — — 46 10,900

Francisco Underground 1.6 2.0 2.2 T — — 8 11,370

Twentymile 1.2 2.6 3.1 T 4 — — 11,200

Somerville Central (6)

0.4 1.2 2.0 T — — — 11,000

— 3.8 6.5 T — — — —

Wildcat Hills Underground (8)

— 1.4 1.3 T — — — —

Cottage Grove (9)

— 0.1 0.4 T — — — —

Tons %Ash %Sulfur Btu (8)

Bear Run USA IN P S T 82 10.5 3.1 11,068 55 10.0 2.6 11,052 137 10.3 2.9 11,062 100%

El Segundo/Lee Ranch USA NM P S T 16 15.8 0.9 9,249 1 16.3 0.7 9,345 17 15.8 0.9 9,243 100%

Gateway North USA IL P U T 36 8.9 2.9 10,892 5 9.0 2.9 10,878 41 8.9 2.9 10,890 100%

Twentymile USA CO P U T 7 10.7 0.5 11,282 1 10.1 0.5 11,227 8 10.6 0.5 11,272 100%

Wild Boar USA IN P S T 9 8.4 2.6 11,034 10 8.1 2.7 11,203 19 8.2 2.6 11,127 100%

Francisco Underground USA IN P U T 1 8.6 3.1 11,515 7 8.8 3.1 11,402 8 8.8 3.1 11,425 100%

Total 151 79 230

Total Assigned 128.8 164.7 182.1 2,578 94 286

Pulverized Coal Injection Metallurgical

Grand total 2,128 374 2,502

Stage Mining Method Coal Type

P Producing S Surface Mine T Thermal

I Idle U Underground Mine C Coking

D Development P Pulverized Coal Injection

E Exploration

Peabody Energy Corporation 2021 Form 10-K

ASSIGNED RESERVES (10)

AS OF DECEMBER 31, 2020

SUMMARY COAL RESOURCES AT END OF THE FISCAL YEAR ENDED DECEMBER 31, 2021 (1)

(Tons in millions)

Attributable Ownership 100% Project Basis Modifying Factors (11)

Proven and Probable Reserves Proven and Probable Reserves

Segment/Mining Complex Interest Owned Leased Surface Underground Owned Leased Surface Underground ROM Factor Yield

Measured and Indicated Peabody

Mining Coal Measured Coal Resources Indicated Coal Resources Coal Resources Inferred Coal Resources Interest

Deposit Country State Stage Method Type Amount Quality Amount Quality Amount Quality Amount Quality (10)

Seaborne Thermal Mining:

Wilpinjong 100% 93 — 93 93 — 93 — 93 93 — 104 % 86 %

(a) 118 — 118 33 85 151 — 151 66 85 100 % 74 %

Tons %Ash %Sulfur Kcal/kg (5)

Wilpinjong AUS NSW P S T 103 23.0 0.5 6,042 25 25.4 0.5 5,851 128 23.5 0.5 6,004 6 27.3 0.5 5,707 100%

Wambo Opencut (9)

AUS NSW P S T 105 20.5 0.4 6,150 176 23.6 0.4 5,850 281 22.4 0.4 5,962 276 24.8 0.4 5,800 50%

Wambo South AUS NSW E U T/C 219 21.5 0.3 6,068 83 27.2 0.3 5,571 302 23.1 0.3 5,931 47 36.3 0.3 4,745 100%

Total 427 284 711 329

Seaborne Metallurgical Mining:

Coppabella 73.3% 22 — 22 22 — 30 — 30 30 — 92 % 78 %

Moorvale 73.3% 6 — 6 6 — 8 — 8 8 — 107 % 79 %

Metropolitan 100% 16 — 16 — 16 16 — 16 — 16 109 % 84 %

Shoal Creek 100% 52 — 52 — 52 52 — 52 — 52 102 % 56 %

North Goonyella 100% 69 — 69 — 69 69 — 69 — 69 105 % 82 %

Middlemount (5)

50% 20 — 20 20 — 40 — 40 40 — 86 % 77 %

Tons %Ash %Sulfur VM% (7)

Shoal Creek USA AL P U C 40 9.6 0.7 25.1 35 9.9 0.7 24.1 75 9.8 0.7 24.6 7 10.3 0.7 24.0 100%

Metropolitan AUS NSW P U C/T 7 15.4 0.4 18.6 8 15.3 0.3 18.7 15 15.3 0.4 18.6 2 16.0 0.3 19.0 100%

Coppabella AUS QLD P S P 13 15.8 0.3 13.1 48 14.3 0.2 12.8 61 14.6 0.2 12.9 73 15.5 0.2 12.3 73.3%

Moorvale AUS QLD P S P 18 18.3 0.3 16.7 14 17.2 0.3 16.7 32 17.8 0.3 16.7 5 15.9 0.3 16.7 73.3%

Moorvale South AUS QLD D S C/P 3 18.3 0.4 18.4 7 18.2 0.4 18.3 10 18.2 0.4 18.3 6 16.8 0.4 17.7 73.3%

NGC GLB2 AUS QLD E U C - - - - 1 15.3 0.6 20.7 1 15.3 0.6 20.7 8 13.6 0.5 20.7 100%

Coppabella North AUS QLD E U P 255 15.8 0.3 14.6 102 16.8 0.3 14.6 357 16.1 0.3 14.6 12 16.5 0.3 14.3 75.5%

Yeerun AUS QLD E S P 16 16.0 0.4 14.3 57 16.2 0.5 15.0 73 16.2 0.4 14.8 46 17.8 0.5 14.7 83.0%

Moorvale North AUS QLD E U P 21 26.0 0.4 12.9 25 24.5 0.5 13.2 46 25.2 0.4 13.1 25 23.2 0.5 13.4 73.3%

Gundyer AUS QLD E U P - - - - 54 16.4 0.2 19.7 54 16.4 0.2 19.7 70 18.3 0.2 18.3 90.0%

Total 373 351 724 254

Powder River Basin Mining:

North Antelope Rochelle 100% 1,546 — 1,546 1,546 — 1,546 — 1,546 1,546 — 92 % 100 %

Caballo 100% 441 — 441 441 — 441 — 441 441 — 90 % 100 %

Rawhide 100% 236 — 236 236 — 236 — 236 236 — 93 % 100 %

Tons %Ash %Sulfur Btu (8)

Caballo USA WY P S T 42 4.7 0.3 8,428 82 5.2 0.4 8,231 124 5.0 0.4 8,298 2 5.4 0.4 8,245 100%

Rawhide USA WY P S T 1 5.5 0.4 8,286 91 5.2 0.3 8,362 92 5.2 0.3 8,361 7 5.7 0.4 8,243 100%

Total 43 173 216 9

Thermal Mining:

Bear Run 100% 230 108 122 230 — 230 108 122 230 — 106 % 72 %

El Segundo/Lee Ranch 100% 24 23 1 24 — 24 23 1 24 — 87 % 100 %

Wild Boar 100% 27 11 16 27 — 27 11 16 27 — 107 % 76 %

Gateway North 100% 46 44 2 — 46 46 44 2 — 46 64 % 62 %

Francisco Underground 100% 8 2 6 — 8 8 2 6 — 8 64 % 64 %

Twentymile 100% 4 2 2 — 4 4 2 2 — 4 117 % 67 %

Tons %Ash %Sulfur Btu (8)

Bear Run USA IN P S T 6 13.7 3.4 10,975 50 16.3 4.0 10,613 56 16.1 4.0 10,652 57 16.5 3.7 10,579 100%

Wild Boar USA IN P S T - - - - 3 11.8 5.8 11,300 3 11.8 5.8 11,300 1 12.3 5.4 11,230 100%

Total 6 53 59 58

Total Assigned 2,958 190 2,768 2,678 280

Grand total 849 861 1,710 650

Peabody Energy Corporation 2021 Form 10-K

ASSIGNED AND UNASSIGNED PROVEN AND PROBABLE COAL RESERVES (10)

AS OF DECEMBER 31, 2020

The sales price assumptions supporting economic recoverability vary depending upon factors such as coal quality and existing customer volume commitments.

For the five-year period 2022 through 2026, the estimated sales prices for seaborne metallurgical mines are based upon estimated premium hard coking coal benchmark prices ranging from $150.00 to $162.00 per tonne.

For seaborne thermal mines, the estimated sales prices for the same period range from approximately $42.00 to $104.00 per tonne, and approximately $9.00 to $45.00 per ton for U.S.

thermal mines.

Subsequent to 2026, for all mines, sales price escalation is assumed at 2.0% to 3.0% per annum through the end of each LOM plan.

The moisture condition for Seaborne Thermal Mining segment coal quality is on an air-dry basis.

The moisture condition for the Seaborne Metallurgical Mining segment coal quality is on an air-dry basis, except for Shoal Creek Mine which is on a dry basis.

The quantities for Australian coal reserves are estimated on an as-shipped moisture basis;

quantities for Australian coal resources are estimated on an in situ moisture basis.

The quality and quantity estimates for U.S.

thermal reserves are calculated on as-shipped moisture basis;

the quality and quantity estimates for U.S.

thermal resources are calculated on an in situ moisture basis.

Kcal/kg (kilocalories per kilogram) is the net calorific value (net heating value) of coal

VM (volatile matter) represents the proportion of certain organic and mineral components in coal, for example, water, carbon dioxide, or sulfur dioxide.

Volatile matter is inversely related to coal rank.

Btu (British thermal unit) is the gross heating value of coal per pound, which includes the weight of moisture in coal on an as-sold basis.

The range of variability of the moisture content in coal may affect the actual shipped Btu content.

Reserve and resource data is maintained and provided by joint venture managing partners utilizing the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

The quantities of reserves and resources are disclosed at Peabody’s proportional ownership share.

Individual Property Disclosure

To determine the Company’s individually material mining operations in accordance with subpart 1300 of Regulation S-K, management considered both quantitative and qualitative factors, assessed in the context of the Company’s overall business and financial condition.

Such assessment included the Company’s aggregate mining operations on all of its mining properties, regardless of the stage of production or the type of coal produced.

Quantitative factors included, among others, mining operations’ relative contributions to the Company’s aggregate historical and estimated revenues, cash flows, and Adjusted EBITDA (as defined in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”) Qualitative factors may include, as applicable, capital expansion plans, long-term pricing outlook, the regulatory environment and various strategic priorities.

The Company concluded that, as of December 31, 2021, its individually material mines are North Antelope Rochelle Mine (NARM), Shoal Creek Mine, Wilpinjong Mine, and the Coppabella-Moorvale Joint Venture.

The Company will update its assessment of individually material mines on an annual basis.

The reserve and resource tables that follow do not include comparative information for resources as of December 31, 2020 as the Company did not present such data previously under the SEC Industry Guide 7 requirements and such data is not required to be presented in connection with the adoption of the disclosure requirements of subpart 1300 of Regulation S-K.

The information that follows relating to such individually material mines is derived, for the most part, from, and in some instances is an extract from, the technical report summaries (“TRS”) relating to such properties prepared in compliance with the Item 601(b)(96) and subpart 1300 of Regulation S-K.

Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein.

Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Annual Report on Form 10-K.

The relevant TRS for NARM, Shoal Creek Mine, Wilpinjong Mine, and the Coppabella-Moorvale Joint Venture are included as Exhibits 96.1, 96.2, 96.3 and 96.4, respectively, to this Annual Report on Form 10-K, and specific sections of such TRS are referenced below using the corresponding exhibit number.

Peabody Energy Corporation 2021 Form 10-K

North Antelope Rochelle Mine

The North Antelope Rochelle Mine (NARM) is a production-stage surface coal mine located sixty-five miles south of Gillette, Wyoming, USA.

NARM is situated in the Gillette Coal Field on the east flank of the Powder River Basin.

NARM began operations in 1999 after Peabody combined its interests in the formerly separate North Antelope Mine and Rochelle Mine.

NARM extracts coal from the Wyodak-Anderson coal seam, which ranges from 60- to 80-feet thick and lies from 100 to 400 feet below the surface in the mining area.

The Company has secured mineral rights through Federal and State lease agreements which cover 30,159 acres.

The typical royalty rate for Federal and State coal leases is 12.5% of realized revenue.

Generally, the leases continue indefinitely with periodic renewal, provided there is diligent coal production or other development within the lease area.

As of December 31, 2021, all required licenses and permits were in place for the operations of NARM.

For additional information regarding mineral rights and permitting, refer to sections 3 and 17 in Exhibit 96.1.

The mining operation consists of multiple open pits in four main mining areas, which allows for quality blending and other optimization strategies.

Overburden is removed by dragline, truck and shovel, dozer and cast blasting methods.

Coal is hauled by truck to one of five dump locations, where it is then crushed and conveyed to silos adjacent to rail load-outs for customer delivery.

Coals of varying characteristics may be blended at a central blending facility along the loadout rail loop.

Coal is sold unwashed, as a run-of-mine (ROM) product.

NARM coal is well recognized for domestic thermal power generation.

For additional information regarding mining and processing methods, refer to sections 13 and 14 in Exhibit 96.1.

The key supporting infrastructure for NARM includes rail services provided by the BNSF Railway Company and Union Pacific Corporation, road access via interstate and state highways and roads, electrical power from a dedicated substation with 230kV and 69kV transmission lines, and water supply from a mine dewatering system and deep wells.

The mining industry in the Powder River Basin anchors numerous communities from which the mine attracts qualified personnel.

For additional information regarding the mine’s infrastructure, refer to sections 13 and 15 in Exhibit 96.1.

Peabody Energy Corporation 2021 Form 10-K

The property, plant, equipment and mine development assets of NARM had a net book value of approximately $406 million at December 31, 2021.

The mine’s operating equipment and facilities meet contemporary mining standards and are adequately maintained to execute the LOM plan.

Routine maintenance, overhauls, and necessary capital replacements are generally included in the LOM plan to support future production.

For additional information regarding capital and equipment, refer to sections 13 and 18 in Exhibit 96.1.

The table below presents NARM coal reserve estimates at December 31, 2021, along with comparative quantities at December 31, 2020.

NARM did not hold any coal resources as of December 31, 2021.

These reserve estimates were supported by the analyses of 4,778 total drill holes within the coal lease area.

The quantity of the coal reserves is estimated on a saleable product basis and deemed 100% attributable to Peabody.

In addition to quantity, the table presents selected key quality parameters on an as-shipped basis.

For additional information regarding coal reserve and resource estimates, refer to sections 11 and 12 in Exhibit 96.1.

NARM - SUMMARY OF RESERVES (1)

(Tons in millions)

Attributable Ownership 100% Project Basis

Proven and Proven and

Total Tons Probable Total Tons Probable

Coal Seam Location Assigned Unassigned Reserves Proven Probable Assigned Unassigned Reserves Proven Probable

Seaborne Thermal Mining (New South Wales) 211 — 211 146 65 244 — 244 176 68

Seaborne Metallurgical Mining:

Alabama 52 — 52 51 1 52 — 52 51 1

New South Wales 16 — 16 2 14 16 — 16 2 14

Queensland 117 90 207 168 39 147 120 267 212 55

Total 185 90 275 221 54

Powder River Basin Mining (Wyoming) 2,223 — 2,223 2,108 115 2,223 — 2,223 2,108 115

Thermal Mining:

Illinois 46 — 46 15 31 46 — 46 15 31

Indiana 265 — 265 195 70 265 — 265 195 70

New Mexico 24 — 24 24 — 24 — 24 24 —

Colorado 4 — 4 4 — 4 — 4 4 —

December 31, 2021 December 31, 2020

Coal Reserves (2)(3)(4)

Tons %Ash %Sulfur Btu % Mine Yield (5)

Proven 1,378 4.4 0.2 8,889 100% 1,431

Probable 106 4.4 0.2 8,965 100% 115

Total 1,484 1,546

Total Proven and Probable 2,958 90 3,048 2,713 335

Year-over-year decrease -4%

The year-over-year decrease in the quantity of coal reserves was driven by production depletion.

Economic recoverability is based upon an estimated average sales price per ton of $13.18 for the five-year period ending December 31, 2026 and assumed escalation of 2.5% per annum during the subsequent period through the end of the LOM plan.

Refer to section 19 of Exhibit 96.1 for detailed price assumptions.

The cut-off grade and metallurgical recovery are not limiting factors for reserve estimates due to consistent coal thickness and established trends of coal quality in the leased area.

The strip ratio increases gradually, but the existing pit length allows an average mineable strip ratio.

Besides the results of drill hole analyses, the main limiting factors include surface infrastructure and lease boundaries.

The quality of coal reserves is estimated on an as-shipped basis.

The quantity of coal reserves is estimated on a saleable product basis, which takes into consideration 92% mining recovery.

The results of the LOM planning process demonstrate the economic recoverability of the coal reserve estimates.

Refer to section 19 of Exhibit 96.1 for economic analysis.

Mine yield is the ratio of estimated saleable product coal over ROM coal tons, with processing loss considered.

Peabody Energy Corporation 2021 Form 10-K

ASSIGNED AND UNASSIGNED - RESERVE CONTROL AND MINING METHOD

AS OF DECEMBER 31, 2020

Shoal Creek Mine

The Shoal Creek Mine is a production-stage underground longwall metallurgical coal mine located thirty-five miles west of Birmingham, Alabama, USA.

The mine is within the east-central portion of the Warrior Coal Field, which is part of the Southern Appalachian coal-producing region.

The Drummond Corporation began producing coal at the mine in 1994.

Peabody Energy acquired the mine from the Drummond Corporation in December 2018.

The mine was idled in the fourth quarter of 2020 due to market conditions and resumed production in November 2021.

Shoal Creek Mine extracts coal from the Mary Lee and Blue Creek coal seams at depths of 1,000 to 1,300 feet.

The Company has secured mineral rights through a combination of private, federal and state mineral leases and surface rights agreements which encompass a total of 31,747 acres of mineral control and 3,490 acres of surface land control.

The majority of the mineral leases are private leases with negotiated royalty rates set at minimum amounts per ton or as percentages of sales realization.

Shoal Creek Mine’s largest lease agreement, representing 28,517 acres of mineral control, expires in 2031 with an option to negotiate an extension.

The expiration dates vary for other leases, but typically include extension provisions.

As of December 31, 2021, all required licenses and permits were in place for the operations of the Shoal Creek Mine.

For additional information regarding mineral rights and permitting, refer to sections 3 and 17 in Exhibit 96.2.

Coal is produced primarily using longwall systems.

The mine also uses continuous miner units for longwall development and limited production.

Mined coal is processed through a wash plant, conveyed to barge loadout facilities on the Black Warrior River, and transported by barge 370 miles to McDuffie Coal Terminal in Mobile Bay, Alabama, in the Gulf of Mexico, for export via ocean-going vessels.

Shoal Creek Mine metallurgical coal has a well-established customer base in Europe, South America, and East Asia for steel making.

For additional information regarding mining and processing methods, refer to sections 13 and 14 in Exhibit 96.2.

The key supporting infrastructure for Shoal Creek Mine includes road access via interstate and state highways and roads, third-party barge services and a barge loadout on the Black Warrior River, the McDuffie Coal Terminal, electrical power provided by 69kV transmission lines, and water supplied from the Black Warrior River and recycled underground water.

The mine’s workforce is drawn primarily from Jasper and Tuscaloosa, Alabama and other adjacent communities.

For additional information regarding the mine’s infrastructure, refer to section 15 in Exhibit 96.2.

Peabody Energy Corporation 2021 Form 10-K

The property, plant, equipment and mine development assets of Shoal Creek Mine had a net book value of approximately $296 million at December 31, 2021.

The mine’s operating equipment and facilities meet contemporary mining standards and are adequately maintained to execute the LOM plan.

Routine maintenance, overhauls and necessary capital replacements are generally included in the LOM plan to support future production.

While the mine was idled for parts of 2020 and 2021, the Company upgraded the mine’s coal handling and preparation plant and made other capital investments to improve its prospective cost structure.

For additional information regarding capital and equipment, refer to sections 13 and 18 in Exhibit 96.2.

The tables below present Shoal Creek Mine’s estimated coal reserves and resources at December 31, 2021, along with comparative quantities for coal reserves at December 31, 2020.

These reserve and resource estimates were supported by the analyses of 1,178 total drill holes within the coal lease area.

The quantity of the coal resources is estimated on an in situ basis as 100% attributable to Peabody.

Coal resources are reported exclusive of coal reserves.

The quantity of the coal reserves and resources are estimated on a saleable product basis as 100% attributable to Peabody.

Coal reserves and resources are reported on selected key quality parameters on a dry basis.

For additional information regarding coal reserve and resource estimates, refer to sections 11 and 12 in Exhibit 96.2.

SHOAL CREEK MINE - SUMMARY OF RESERVES AND RESOURCES (1)

(Tons in millions)

Attributable Ownership 100% Project Basis

Reserve Control Mining Method Reserve Control Mining Method

Coal Seam Location Owned Leased Surface Underground Owned Leased Surface Underground

Seaborne Thermal Mining (New South Wales) — 211 126 85 — 244 159 85

Seaborne Metallurgical Mining:

Alabama — 52 — 52 — 52 — 52

New South Wales — 16 — 16 — 16 — 16

Queensland — 207 54 153 — 267 85 182

Total — 275 54 221

Powder River Basin Mining (Wyoming) — 2,223 2,223 — — 2,223 2,223 —

Thermal Mining:

Illinois 44 2 — 46 44 2 — 46

Indiana 121 144 257 8 121 144 257 8

New Mexico 23 1 24 — 23 1 24 —

Colorado 2 2 — 4 2 2 — 4

Total 190 149 281 58

Total Proven and Probable 190 2,858 2,684 364

December 31, 2021 December 31, 2020

Coal Reserves (2)(4)(5)(6)

Tons %Ash %Sulfur %VM % Mine Yield (7)

Proven 16 10.2 0.7 30.4 46% 51

Probable 2 10.2 0.7 30.3 46% 1

Year-over-year decrease -65%

December 31, 2021

Coal Resources (2)(3)(4)(5)

Tons %Ash %Sulfur VM%

Measured 40 9.6 0.7 25.1

Indicated 35 9.9 0.7 24.1

Measured and indicated 75 9.8 0.7 24.6

Inferred 7 10.3 0.7 24.0

The year-over-year decrease in coal reserves reflects 2021 production depletion and the reclassification of certain mine areas to resources until further drilling and studies are completed.

Refer to section 19 of Exhibit 96.2 for additional information.

Economic recoverability is based upon an estimated average sales price per ton of $125.37 for the five-year period ending December 31, 2026 and assumed escalation of 2.8% per annum during the subsequent period through the end of the LOM plan.

Refer to section 19 of Exhibit 96.2 for detailed price assumptions.

The quality of coal reserves and resources are estimated on a dry basis.

The quantity of resource estimates are on an in situ basis, which doesn’t take into consideration coal loss during mining and processing.

The coal resource boundary is established by considering various factors, including results from drill hole analyses, coal control, geological features, faults and other surface features.

The cut-off grade and metallurgical recovery are not limiting factors for the reserve and resource estimates due to relatively consistent coal quality and float recovery from the lab results within the assessed area.

The historically mined coal thickness has been used as the main criteria for the resource boundary based on the mine’s actual performance in the last two decades.

The quantity of coal reserves is estimated on a saleable product basis, which takes into consideration of unmined coal (pillars, etc.), 20% coal loss during mining and processing, and additional washing recovery.

The results from the LOM planning process demonstrate the economic recoverability of the coal reserve estimate.

Refer to section 19 of Exhibit 96.2 for economic analysis.

Mine yield is the ratio of estimated saleable product coal over ROM coal tons with mainly processing loss considered.

Peabody Energy Corporation 2021 Form 10-K

ASSIGNED AND UNASSIGNED PROVEN AND PROBABLE COAL RESERVES - SULFUR CONTENT

AS OF DECEMBER 31, 2020

Wilpinjong Mine

The Wilpinjong Mine is a production-stage surface thermal coal mine situated approximately 25 miles northeast of Mudgee in New South Wales, Australia.

Peabody acquired the mine as part of its acquisition of Excel Coal Pty Ltd (Excel) in 2006.

Excel began the development of Wilpinjong Mine in 2006 and it commenced production under Peabody ownership in 2007.

A third-party contactor managed mining operations until 2013, when the Company converted the mine to owner-operated.

The Wilpinjong Mine extracts coal from the Moolarben and Ulan coal seams which have a combined thickness from 6 to 10 meters and a typical depth less than 60 meters in the Illawarra Coal Measures on the northwest margin of the Sydney Basin.

The Company secured two exploration licenses of 1,518 hectares and three mining licenses of 3,723 hectares through the New South Wales Minister of Planning.

The typical royalty rate is 8.2% of the value of coal recovered.

The mining licenses require renewal upon expiration in 2027 for 2,863 hectares and in 2039-2040 for 860 acres.

The renewal application for two exploration licenses is currently pending approval.

As of December 31, 2021, all required licenses and permits were in place for the operations of Wilpinjong.

For additional information regarding mineral rights and permitting, refer to sections 3 and 17 in Exhibit 96.3.

Conventional open cut mining methods are used at the Wilpinjong Coal Mine, with multiple pits at a low strip ratio allowing for relatively rapid pit advance.

Overburden is removed by a combination of cast blasting, doze, and truck and shovel methods.

Haul trucks transport coal to various hoppers and pads for blending and temporary storage, as necessary, and then to a coal handling and processing plant to be crushed and washed.

Coal is conveyed to a rail loadout and transported by train to either domestic customers or to the Port of Newcastle and seaborne customers for thermal power generation.

For additional information regarding mining and processing methods, refer to sections 13 and 14 in Exhibit 96.3.

The key supporting infrastructure for Wilpinjong Mine includes road access via public roads, port service at two terminals at the Port of Newcastle, above and below rail services, electrical power from a 66kV transmission line, and water supply from captured surface runoff and deep wells.

The mine’s proximity to other large coal producers in the region provides access to a significant pool of experienced mining personnel.

For additional information regarding the mine’s infrastructure, refer to section 15 in Exhibit 96.3.

Peabody Energy Corporation 2021 Form 10-K

The property, plant, equipment and mine development assets of Wilpinjong Mine had a net book value of approximately $386 million at December 31, 2021.

The mine’s operating equipment meets contemporary mining standards and is adequately maintained to execute the LOM plan.

Routine maintenance, overhauls and necessary capital replacements are generally included in the LOM plan to support future production.

During 2018, the Company began an expansion project at Wilpinjong Mine that will extend the mine life from 2026 to 2030 and allow higher annual production rates through access to an additional 55 million tonnes of coal reserves.

The Company capitalized approximately $61 million related to the project through December 31, 2021 and expects the total cost to reach approximately $74 million.

For additional information regarding capital and equipment, refer to sections 13 and 18 in Exhibit 96.3.

The tables below present Wilpinjong Mine’s estimated coal reserves and resources at December 31, 2021, along with comparative quantities of coal reserves at December 31, 2020.

These reserve and resource estimates were supported by the analyses of 1,271 total drill holes within the coal lease area.

The quantity of the coal resources is estimated on an in situ basis as 100% attributable to Peabody.

Coal resources are reported exclusive of coal reserves.

The quantity of the coal reserves is estimated on a saleable product basis as 100% attributable to Peabody.

Coal reserves and resources are reported on selected key quality parameters on an air-dried basis.

For additional information regarding coal reserve and resource estimates, refer to sections 11 and 12 in Exhibit 96.3.

WILPINJONG MINE - SUMMARY OF RESERVES AND RESOURCES (1)

(Tons in millions)

Attributable Ownership 100% Project Basis

Sulfur Content (1)

>1.2 to 2.5 lbs.

Sulfur Dioxide Sulfur Dioxide Sulfur Dioxide Sulfur Dioxide Sulfur Dioxide Sulfur Dioxide Received

Type of per per per per per per Btu

Coal Seam Location Coal Million Btu Million Btu Million Btu Million Btu Million Btu Million Btu per Pound (2)

Seaborne Thermal Mining (New South Wales) T/C 211 — — 244 — — 10,700

Seaborne Metallurgical Mining:

Alabama C 52 — — 52 — — 12,700

New South Wales C/P/T 16 — — 16 — — 12,600

Queensland C/P/T 207 — — 267 — — 12,400

Total 275 — —

Powder River Basin Mining (Wyoming) T 2,173 50 — 2,173 50 — 8,700

Thermal Mining:

Illinois T — — 46 — — 46 10,800

Indiana T 4 25 236 4 25 236 11,000

New Mexico T 1 19 4 1 19 4 9,150

Colorado T 4 — — 4 — — 11,200

Total 9 44 286

Total Proven and Probable 2,668 94 286

Pulverized Coal Injection Metallurgical

December 31, 2021 December 31, 2020

Coal Reserves (5)(6)

Tons %Ash %Sulfur Kcal/kg % Mine Yield (7)

Proven 71 24.3 0.5 5,940 81% 91

Probable 5 29.7 0.4 5,478 95% 2

Year-over-year decrease -18%

December 31, 2021

Coal Resources (2)(3)(4)

Tons %Ash %Sulfur Kcal/kg

Measured 103 23.0 0.5 6,042

Indicated 25 25.4 0.5 5,851

Measured and indicated 128 23.5 0.5 6,004

Inferred 6 27.3 0.5 5,707

The year-over-year decrease in the quantity of coal reserves was driven by production depletion.

Economic recoverability is based upon product-specific estimated average sales prices per tonne of $39.18 to $47.98 for the five-year period ending December 31, 2026 and assumed escalation of 2.5% to 3.0% per annum during the subsequent period through the end of the LOM plan.

Refer to section 19 of Exhibit 96.3 for detailed price assumptions.

The quality of coal resources is on an in situ , air-dry basis.

The quantity of coal resource estimates is on an in situ basis, which does not take into consideration coal loss during mining and processing.

Besides the results from drill hole analyses, the raw ash is a key quality parameter that is relevant to both the cut-off grade and metallurgical recovery.

The resource is limited by a maximum of 50% raw ash (air-dry basis).

Due to the relatively consistent coal thickness and shallow depth, no other geological limiting factors are applied except for known geological anomalies such as paleochannels and igneous intrusion.

The quality of coal reserves is based on an air-dry basis.

It is the laboratory results from the core samples with adjustments that reflect the reconciliation results from actual production.

The quantity of coal reserves is estimated on a saleable product basis, which takes into consideration of mining and processing loss.

The economic results from the LOM planning process demonstrate the economic viability of the coal reserve estimate.

Refer to section 19 of Exhibit 96.3 for economic analysis.

Mine yield is the ratio of estimated saleable product coal over ROM coal tons with mainly processing loss considered.

Peabody Energy Corporation 2021 Form 10-K

(1) Compliance coal is defined by Phase II of the CAA as coal having sulfur dioxide content of 1.2 pounds or less per million Btu.

Non-compliance coal is defined as coal having sulfur dioxide content in excess of this standard.

(2) As-received Btu per pound includes the weight of moisture in the coal on an as-sold basis.

The range of variability of the moisture content in coal across a given region may affect the actual shipped Btu content of current production from assigned reserves.

(3) Includes the Wambo Open-Cut Mine and the Wambo Underground Mine areas.

(4) The Company’s Millennium Mine ceased production in March 2020, with sales continuing throughout May 2020.

(5) Represents our 50% interest in Middlemount, which owns the Middlemount Mine in Queensland, Australia.

Because that entity is accounted for as an unconsolidated equity affiliate, 2020, 2019 and 2018 tons produced by Middlemount have been excluded from the “Summary of Coal Production and Sulfur Content of Assigned Reserves” table.

Middlemount produced 3.2 million tons, 2.9 million tons, and 4.2 million tons of coal in 2020, 2019 and 2018, respectively (on a 100% basis).

(6) The Company’s Somerville Central Mine ceased production in December 2020, with sales continuing into January 2021.

(7) The Company’s Kayenta Mine closed during August 2019 upon termination of its coal supply agreement with the Navajo Generating Station in Arizona.

(8) The Company’s Wildcat Hills Underground Mine ceased production in December 2019, with sales continuing throughout April 2020.

(9) The Company’s Cottage Grove Mine ceased production in May 2019, with sales continuing throughout July 2019.

(10) Assigned reserves represent recoverable coal reserves that are controlled and accessible at active operations as of December 31, 2020.

Unassigned reserves represent coal at currently non-producing locations that would require significant new mine development, mining equipment or plant facilities before operations could begin on the property.

(11) The modifying factors reflect the assumptions which are utilized to convert coal quantities and qualities as in ground to run of mine (ROM) coal after mining, and eventually to saleable product coal after processing.

Coal reserves are reported as an estimation of the final saleable quantity, which takes into account any losses and dilutions during mining and processing.

We generally keep track of coal reserves through in place coal, ROM coal and product coal.

In place coal for U.S.

underground reserves excludes planned barrier pillars, but includes regular pillars from projected underground extractions.

In place coal for Australian underground reserves is exclusive of all planned pillars.

The difference is due to historic practice and software used by each country.

The ROM factor represents the estimated ROM coal in relation to the coal in place with considerations of coal losses, dilutions and remaining pillars during mining processes.

The yield is the ratio of estimated saleable product coal over ROM coal tons with mainly processing loss considered.

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

The Wambo Open-Cut reserve is estimated for our 50% interest in United Wambo Joint Venture.

Coppabella-Moorvale Joint Venture

The Company’s Coppabella Moorvale Joint Venture (CMJV) mines are located approximately 75 miles southwest of Mackay, near the township of Coppabella, in central Queensland, Australia.

The CMJV includes two production-stage surface coal mines, the Coppabella Mine and the Moorvale Mine, and one surface coal mine under development, Moorvale South.

Peabody owns 73.3% of the joint venture and is responsible for operations management.

CMJV originally was developed by Macarthur Coal Limited (Macarthur), with production commencing in 1998 at Coppabella Mine and 2002 at Moorvale Mine.

Peabody acquired Macarthur in December 2011 and assumed its majority interest in CMJV.

The CMJV mines primarily extract coal from the Leichardt seam in the Rangal Coal Measures of the Bowen Basin.

The seam has a thickness from 5 to 10 meters and a typical depth of less than 250 meters.

A portion of the Vermont seam is expected to be economically mineable at Moorvale South, once developed.

The CMJV mines operate with a total of fourteen mining leases and one mineral development license issued by the Queensland state government, covering 13,459 hectares in total.

Coal production is subject to royalties payable to the Queensland state government ranging from 7% to 15% of realized revenue, depending upon the lease.

In addition, there are special private royalty agreements established in relation to exploration efforts.

The primary mining leases for the Coppabella Mine expire in 2040 and other peripheral leases expire between 2023 and 2035.

The Moorvale Mine has two mining leases which expire in 2023, and a third in 2028.

The proposed Moorvale South mine has two mining leases which expire in 2030, and its relevant mineral development license expires in 2024.

As of December 31, 2021, all required licenses and permits were in place for the operations of CMJV.

For additional information regarding mineral rights and permitting, refer to sections 3 and 17 in Exhibit 96.4.

Conventional open cut mining methods are used at the CMJV mines.

Coppabella Mine utilizes a dragline and two electric rope shovels to perform the majority of overburden removal, supplemented by diesel hydraulic excavators, which are also used to extract coal.

Moorvale Mine utilizes only diesel hydraulic excavators for overburden removal.

Both mines utilize cast and dozer push operations where applicable.

Coal is trucked via internal haul roads for direct dumping to the hopper, or rehandled from pads to the dump hopper.

Coal is crushed and washed at two processing plants, then transported by rail to the Dalrymple Bay Coal Terminal for seaborne customers.

The CMJV produces a range of products including pulverized coal injection coal, coking coal and thermal coal.

For additional information regarding mining and processing methods, refer to sections 13 and 14 in Exhibit 96.4.

Peabody Energy Corporation 2021 Form 10-K

The key supporting infrastructure for CMJV includes the port service at Dalrymple Bay Coal Terminal, above and below rail services, road access via public roads, electrical power from 66kV transmission lines, and water supply from captured surface runoff and commercial pipelines.

Temporary housing near the mine sites provides employees with overnight accommodations, as necessary.

The mines draw personnel primarily from nearby Moranbah, Nebo and Mackay, Queensland.

For additional information regarding the mine’s infrastructure, refer to section 15 in Exhibit 96.4.

The property, plant, equipment and mine development assets of CMJV had a net book value of approximately $170 million at December 31, 2021.

The CMJV’s operating equipment meets contemporary mining standards and is adequately maintained to execute the mine plan.

Routine maintenance, overhauls and necessary capital replacements are generally included in the LOM plan to support future production.

For additional information regarding capital and equipment, refer to sections 13 and 18 in Exhibit 96.4.

The tables below present estimates of the CMJV coal reserves and resources as of December 31, 2021, along with comparative quantities of coal reserves at December 31, 2020.

These reserve and resource estimates were supported by the analyses of 4,763 total drill holes within the coal lease areas.

The quantity of the coal resources is estimated on an in situ basis as 73.3% attributable to Peabody.

Coal resources are reported exclusive of coal reserves.

The quantity of the coal reserves is estimated on a saleable product basis as 73.3% attributable to Peabody.

Coal reserves and resources are reported on selected key quality parameters on an air-dry basis.

For additional information regarding coal reserve and resource estimates, refer to sections 11 and 12 in Exhibit 96.4.

CMJV - SUMMARY OF RESERVES AND RESOURCES (1)

(Tons in millions)

December 31, 2021 December 31, 2020

Coal Reserves (5)(6)

Tons %Ash %Sulfur %VM % Mine Yield (7)

Proven 14 9.8 0.3 13.1 76% 21

Probable 6 9.5 0.3 11.8 70% 13

Year-over-year decrease -41%

December 31, 2021

Coal Resources (2)(3)(4)

Tons %Ash %Sulfur VM%

Measured 34 17.4 0.3 15.5

Indicated 69 15.3 0.3 14.1

Measured and indicated 103 16.0 0.3 14.6

Inferred 84 15.6 0.3 12.9

The decrease in reserves reflects 2021 production depletion and reclassification of certain mine areas to resources until further drilling and studies are completed.

Peabody Energy Corporation 2021 Form 10-K

Economic recoverability is based upon product-specific estimated average sales prices per tonne of $107.61 to $116.49 for the five-year period ending December 31, 2026 and assumed escalation of 2.5% per annum during the subsequent period through the end of the LOM plan.

Refer to section 19 of Exhibit 96.4 for detailed price assumptions.

The quality of coal resources is estimated on an in situ , air-dry basis.

The quantity of coal resource is estimated on an in situ basis, which doesn’t take into consideration coal loss during mining and processing.

Besides the results from drill hole analyses, the resource estimates are based on the following criteria:

— Open cut resources are limited to an area defined by pit shell with RF150 (revenue factor 150%), with exception of Moorvale South MDL 3034 open cut resources are limited to 150m depth of cover

— Minimum mining thickness of 0.3m for open cut

— Minimum mining thickness of 2m for underground resources

— Underground resources excluded in areas of seam dip exceeding 15 degrees

— Underground resources depth cutoff at 500m depth of cover, with exception of Moorvale Mine depth cutoff at 300m depth of cover

— A seam quality cut-off greater than 50% raw ash (a.d.) is excluded from resources

— No weathered coal included

— Intrusive sills and dykes within seams are excluded from the resources

— Heat-affected coal is included in the resources

— Other limiting factors include surface infrastructure and lease boundary

The quality of coal reserves is estimated on an air-dry basis.

The quantity of coal reserves is estimated on a saleable product basis which takes into consideration of mining and processing loss.

The economic results from the LOM planning process demonstrate the economic viability of the coal reserve estimate.

Refer to section 19 of Exhibit 96.4 for economic analysis.

Mine yield is the ratio of estimated saleable product coal over ROM coal tons with mainly processing loss considered.

Internal Controls

The preparation of coal reserve and resource estimates is completed in accordance with the Company’s prescribed internal control procedures, which are designed specifically to ensure the reliability of such estimates presented herein.

Annually, QPs and other employees review the estimates of mineral reserves and mineral resources, the supporting documentation, and compliance with applicable internal controls.

Such controls employ management systems, standardized procedures, workflow processes, multi-functional supervision and management approval, internal and external reviews, reconciliations, and data security covering record keeping, chain of custody and data storage.

The internal controls for reserve and resource estimates also cover exploration activities, sample preparation and analysis, data verification, processing, metallurgical testing, recovery estimation, mine design and sequencing, and reserve and resource evaluations, with environmental, social and regulatory considerations.

The quality assurance and control protocols over the assaying of drill hole samples are performed by reputable commercial laboratories following certification and accreditation programs established by the American Society for Testing and Materials (ASTM) or Australian National Association of Testing Authorities (NATA).

The reserve and resource estimates have inherent risks due to data accuracy, uncertainty from geological interpretation, mine plan assumptions, uncontrolled rights for mineral and surface properties, environmental challenges, uncertainty for future market supply and demand, and changes in laws and regulations.

Management and QPs are aware of those risks that might directly impact the assessment of coal reserves and resources.

The current coal reserves and resources are estimated based on the best information available and are subject to re-assessment when conditions change.

Refer to Item 1A.

“Risk Factors” for discussion of risks associated with the estimates of the Company’s reserves and resources.

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 2. Properties