What changed in this filing

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Item 1. Business

2023-02-24 compared with 2022-02-18 · 245 added, 195 removed, 680 unchanged (39% of the section changed)

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(Middlemount).

In addition to its mining operations, the Company markets and brokers coal from other coal producers, both as principal and agent, and trades coal and freight-related contracts.

In addition to its mining operations, the Company markets and brokers coal from other coal producers, trades coal and freight-related contracts, and, during 2022, partnered in a joint venture with the intent of developing various sites, including certain reclaimed mining land held by the Company in the U.S., for utility-scale photovoltaic solar generation and battery storage.

Segment and Geographic Information

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Peabody Energy Corporation 2022 Form 10-K

Australian Locations

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and Australia.

The mines are listed within their respective mining segment in descending order, as determined by tons produced in 2021.

The mines are listed within their respective reporting segment in descending order, as determined by tons produced in 2022.

Segment/Mining Complex Location Mine Type Mining Method Coal Type Primary Transport Method Processing

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Wambo Open-Cut (1)

New South Wales S T/S T R, EV Yes 2.4 4.0 3.4

New South Wales S T/S T, C R, EV Yes 2.0 2.4 4.0

Wambo Underground (2)

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Queensland S DL, D, T/S P R, EV Yes 2.4 2.1 2.2

Queensland S D, T/S C, P, T R, EV Yes 1.3 1.2 1.7

Metropolitan (4)

New South Wales U LW C, P, T R, EV Yes 1.8 1.0 1.0

Queensland S D, T/S C, P, T R, EV Yes 1.5 1.3 1.2

Shoal Creek (5)

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Thermal Mining

Bear Run Indiana S DL, D, T/S T Tr, R Yes 6.0 5.2 6.8

Bear Run Indiana S DL, D, T/S T Tr, R, EV Yes 6.7 6.0 5.2

El Segundo/Lee Ranch New Mexico S DL, D, T/S T R No 3.7 3.7 4.6

Wild Boar Indiana S D, T/S, HW T Tr, R, R/B, T/B Yes 2.4 2.0 2.5

Gateway North Illinois U CM T Tr, R, R/B, T/B Yes 1.8 1.8 3.0

Twentymile Colorado U LW T R, Tr Yes 1.7 1.2 2.6

Gateway North Illinois U CM T Tr, R, R/B, T/B, EV Yes 2.4 1.8 1.8

Wild Boar Indiana S HW, DL, D, T/S T Tr, R, R/B, T/B Yes 2.3 2.4 2.0

Francisco Underground Indiana U CM T R Yes 1.8 1.5 1.6

Twentymile Colorado U LW T R, Tr, EV Yes 1.5 1.7 1.2

Somerville Central (6)

Indiana S DL, D, T/S T R, R/B, T/B, T/R No — — 0.4

Arizona S DL, T/S T R No — — 3.8

Wildcat Hills

Underground (8)

Illinois U CM T T/B No — — 1.4

Cottage Grove (8)

Illinois S D, T/S T T/B No — — 0.1

S Surface Mine B Barge

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Because Middlemount is accounted for as an unconsolidated equity affiliate, the table above excludes tons produced from that mine, which totaled 1.4 million, 2.0 million and 1.6 million tons, respectively (on a 50% basis).

(8) The mine ceased production in 2019.

Refer to the Reserves and Resources tables within Item 2.

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Sales under long-term coal supply agreements comprised approximately 85%, 84% and 89% of the Company’s worldwide sales from its mining operations (by volume) for the years ended December 31, 2022, 2021 and 2020, respectively.

For the year ended December 31, 2021, Peabody derived 26% of its revenues from coal supply agreements from its five largest customers.

For the year ended December 31, 2022, Peabody derived 28% of its revenue from coal supply agreements from its five largest customers.

Those five customers were supplied primarily from 16 coal supply agreements (excluding trading and brokerage transactions) expiring at various times from 2023 to 2025.

Peabody’s largest customer in 2021 contributed revenue of approximately $258 million, or approximately 8% of Peabody’s total revenues from coal supply agreements, and has contracts expiring at various times from 2022 to 2025.

Peabody’s largest customer in 2022 contributed revenue of approximately $358 million, or approximately 7% of Peabody’s total revenue from coal supply agreements, and has contracts expiring at various times from 2023 to 2024.

Peabody’s sales backlog, which includes coal supply agreements subject to price reopener and/or extension provisions, was approximately 314 million and 283 million tons of coal as of January 1, 2023 and 2022, respectively.

Contracts in backlog have remaining terms ranging from one to nine years and represent approximately two years of production based on the Company’s 2021 production volume of 126.9 million tons.

Contracts in backlog have remaining terms ranging from one to ten years and represent approximately three years of production based on the Company’s 2022 production volume of 122.9 million tons.

Approximately 62% of its backlog is expected to be filled beyond 2023.

Seaborne Mining Operations.

Revenues from Peabody’s Seaborne Thermal Mining and Seaborne Metallurgical Mining segments represented approximately 50%, 42% and 45% of its total revenues from coal supply agreements for the years ended December 31, 2021, 2020 and 2019, respectively, during which periods the coal mining activities of those segments contributed respective amounts of 18%, 19% and 17% of its sales volumes from mining operations.

The Company’s production is primarily sold into the seaborne thermal and metallurgical markets, with a majority of those sales executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically.

Industry commercial practice, and Peabody’s typical practice, is to negotiate pricing for seaborne thermal coal contracts on an annual, spot or index basis and seaborne metallurgical coal contracts on a bi-annual, quarterly, spot or index basis.

Revenue from Peabody’s Seaborne Thermal Mining and Seaborne Metallurgical Mining segments represented approximately 59%, 50% and 42% of the Company’s total revenue from coal supply agreements for the years ended December 31, 2022, 2021 and 2020, respectively, during which periods the coal mining activities of those segments contributed respective amounts of 18%, 18% and 19% of the Company’s sales volumes from mining operations.

Production from these segments is primarily sold into the seaborne thermal and metallurgical markets, with a majority of those sales executed through annual and multi-year international coal supply agreements that contain provisions requiring both parties to renegotiate pricing periodically, with spot, index and quarterly sales arrangements also utilized.

For its seaborne mining operations, the portion of sales volume under contracts with a duration of less than one year represented 41% in 2022.

Thermal Mining Operations.

Revenues from Peabody’s Powder River Basin Mining and Other U.S.

Thermal Mining segments, in aggregate, represented approximately 50%, 58% and 55% of its revenues from coal supply agreements for the years ended December 31, 2021, 2020 and 2019, respectively, during which periods the coal mining activities of those segments contributed respective aggregate amounts of approximately 82%, 81% and 83% of its sales volumes from mining operations.

Revenue from Peabody’s Powder River Basin Mining and Other U.S.

Thermal Mining segments, in aggregate, represented approximately 41%, 50% and 58% of the Company’s revenue from coal supply agreements for the years ended December 31, 2022, 2021 and 2020, respectively, during which periods the coal mining activities of those segments contributed respective aggregate amounts of approximately 82%, 82% and 81% of the Company’s sales volumes from mining operations.

The Company expects to continue selling a significant portion of coal production from its U.S.

thermal mining segments under existing long-term supply agreements.

thermal operating 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.

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Peabody’s approach is to selectively renew, or enter into new, long-term supply agreements when it can do so at prices and terms and conditions it believes 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, fluidity of natural gas pricing and the increased use of renewable energy sources.

Over the last few years, Peabody’s customers have shifted to long-term supply agreements with shorter durations, driven by the reduced utilization of plants and plant retirements, fluidity of natural gas pricing and the increased use of renewable energy sources.

Transportation

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In each case, the Company usually pays transportation costs from the mine to the port, including any demurrage costs (fees paid to third-party shipping companies for loading time that exceeded the stipulated time).

Peabody Energy Corporation 2022 Form 10-K

The Company believes it has good relationships with U.S.

and Australian rail carriers and port and barge companies due, in part, to its modern coal-loading facilities and the experience of its transportation coordinators.

During the year ended December 31, 2022, rail service constraints due, in part, to labor shortages and weather conditions experienced by Peabody’s rail service providers, have negatively impacted U.S.

thermal shipment volumes.

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

Peabody Energy Corporation 2021 Form 10-K

Export Facilities.

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Peabody’s U.S.

thermal mining operations exported less than 1% of its annual tons sold during both the years ended December 31, 2021 and 2019.

thermal mining operations exported less than 1% of their annual tons sold during both the years ended December 31, 2022 and 2021.

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

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

Surface and underground mining equipment demand and lead times have increased in recent periods.

Surface and underground mining equipment demand and lead times for parts and components have increased in recent periods.

Peabody consistently uses its global leverage with major suppliers and comprehensive planning processes to ensure security of supply to meet the requirements of its active mines.

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Peabody does not believe that it has undue operational or financial risk associated with its dependence on any individual service providers.

Throughout 2022, inflationary pressures and supply chain constraints have contributed to rising costs for mining equipment, supplies and services.

This trend may continue to impact future periods.

Demand for coal and the prices that the Company will be able to obtain for its coal are highly competitive and influenced by factors beyond the Company’s control, including but not limited to global economic conditions;

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the impact of weather on heating and cooling demand;

taxes and environmental regulations imposed by the U.S.

the capacity and cost of transportation;

geopolitical risks;

and taxes and environmental regulations imposed by the U.S.

and foreign governments.

Peabody Energy Corporation 2022 Form 10-K

Thermal Coal.

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The Henry Hub Natural Gas Prompt Price averaged $6.54 per mmBtu in 2022, versus $3.72 and $2.13 per mmBtu in 2021 and 2020, respectively.

In addition, the competitiveness of other alternative fuel sources for electricity generation has been strengthened by the growth of government subsidized renewable energy generation.

In addition, the competitiveness of other alternative fuel sources for electricity generation has been strengthened by the growth of renewable energy generation.

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 approximately thirty-two percent.

Peabody Energy Corporation 2021 Form 10-K

coal power capacity has fallen by approximately thirty-six percent.

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

The competitiveness and availability of natural gas, liquefied natural gas, oil, nuclear, hydro, wind, solar and biomass varies by country and region.

Seaborne thermal coal consumption is also impacted by the competitiveness of delivered seaborne thermal coal supply from key exporting countries such as Indonesia, Australia, Russia, Colombia, the U.S.

and South Africa, among others.

In addition, seaborne thermal coal import demand can be significantly impacted by the availability of domestic coal production, particularly in the two leading coal import countries, China and India, among others.

China’s unofficial ban on Australian coal in recent years continued until January 2023 and impeded traditional trade flows.

Global thermal coal markets have been turbulent during 2022, due in part to the Russian-Ukrainian conflict and the subsequent ban of Russian coal by European countries.

In addition to its alternative fuel source competitors, Peabody’s principal U.S.

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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.

Trade flow disruptions have occurred during 2022 related to China’s unofficial ban on Australian coal and sanctions imposed on Russian coal imports.

Major international direct competitors (listed alphabetically) include Anglo American;

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and Yancoal Australia Ltd, among others.

Peabody Energy Corporation 2022 Form 10-K

Cybersecurity Risk Management

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As the Company implements newer technologies such as cloud, analytics, automation and “internet of things,” the threats to its business operations from cyber intrusions, denial of service attacks, manipulation and other cyber misconduct affecting both the Company and its partners’ technologies increase.

To address the risk, the Company continues to evolve its risk management approach in an effort to continually assess and improve its cybersecurity risk detection, deterrence and recovery capabilities.

Peabody’s cybersecurity strategy emphasizes reduction of cyber risk exposure and continuous improvement of its cyber defense and resilience capabilities.

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(i) proactive management of cyber risk to ensure compliance with contractual, legal and regulatory requirements, (ii) performing due diligence on third parties to ensure they have sound cybersecurity practices in place, (iii) ensuring essential business services remain available during a business disruption, (iv) implementing data policies and standards to protect sensitive company information and (v) exercising cyber incident response plans and risk mitigation strategies to address potential incidents should they occur.

During 2021, a software vendor that provides cloud services to the Company for its payroll function suffered a significant ransomware attack.

The Company’s mitigation actions were adequate to avoid significant operational disruptions or material financial losses.

Human Capital

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

Peabody endeavors to engage with its organized workforce and foster strong relationships with those organizations built on trust and communication, which was evidenced in 2021 by successful labor negotiations at its Shoal Creek, Wambo and Metropolitan Mines.

Peabody endeavors to engage with its organized workforce and foster strong relationships with those organizations built on trust and communication.

As of December 31, 2022, approximately 3,600 of Peabody’s employees are located in the U.S., with the remainder primarily located in Australia.

About 94% of its team members work for mine operations in the U.S.

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

Louis or other business offices.

Peabody Energy Corporation 2021 Form 10-K

and Australia, while the remaining are based out of its global headquarters in St.

Louis or its business offices in Brisbane and Beijing.

Peabody strives to create a strong, united workforce with a commitment to safety as a way of life.

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Peabody seeks a workforce that is comprised of diverse backgrounds, thoughts and experiences as a means to drive innovation and excellence within its business, and has formalized inclusion programs and training in policy and practice.

Such diversity may also serve to mitigate risks to the business in the current tight labor market.

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

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Peabody actively seeks employees' feedback, including through surveys and focus groups on its employee value proposition.

The typical Peabody employee has approximately eight years of experience with the company, and more than 51% of all Peabody employees remain employed with the company for more than five years.

The typical Peabody employee has approximately seven years of experience with the company, and more than 47% of all Peabody employees remain employed with the company for more than five years.

The Company offers a variety of learning events, including mentoring and development programs to aid its employees in their career growth.

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Spurbeck 49 Executive Vice President and Chief Financial Officer

Jarboe 48 Chief Administrative Officer and Corporate Secretary

Yeates 62 Executive Vice President and Chief Operating Officer

Jarboe 49 Chief Administrative Officer and Corporate Secretary

Hathhorn 52 President - U.S.

Jamie Frankcombe 62 President - Australian Operations

Forkin III 63 Senior Vice President - Corporate Development and Strategy

Forkin III 64 Chief Development Officer

(1) As of February 17, 2023.

Peabody Energy Corporation 2022 Form 10-K

Grech was named Peabody’s President and Chief Executive Officer in June 2021.

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

Jarboe was named Peabody’s Chief Administrative Officer and Corporate Secretary in November 2021 after serving as Chief Legal Officer and Corporate Secretary since March 2020.

He leads the Company’s global human resources, legal, government affairs, and ethics and compliance functions.

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

Previously, 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.

Peabody Energy Corporation 2021 Form 10-K

Yeates was named Peabody’s Executive Vice President and Chief Operating Officer in October 2020.

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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.

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

Jarboe was named Peabody’s Chief Administrative Officer and Corporate Secretary in November 2021 after serving as Chief Legal Officer and Corporate Secretary since March 2020.

He leads the Company’s global human resources, legal, government affairs, and ethics and compliance functions.

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

Previously, Mr.

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

Hathhorn was named Peabody’s President - U.S.

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He has executive responsibility for the Company’s U.S.

operating platform, which includes overseeing the areas of health and safety, operations, product delivery and support functions.

operating platform, which includes leadership of health, safety and environment, people, operational performance and product delivery.

Hathhorn has more than 30 years of experience in mining engineering and operations in North and South America and in Australia.

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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 2022 Form 10-K

Jamie Frankcombe was named Peabody’s President - Australian Operations in November 2021.

He has executive responsibility for the Company’s Australian operating platform, which includes overseeing the areas of health and safety, environment, people, operational performance and product delivery.

He has executive responsibility for the Company’s Australian operating platform, which includes leadership of health, safety and environment, people, operational performance and product delivery.

He is a senior mining executive with 30 years of experience in developing and managing large-scale open cut and underground coal, iron ore, copper and gold mines in Australia, Indonesia, Asia and the Americas.

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from September 2017 to July 2021.

Frankcombe holds an Honours Degree in Engineering (Mining) and a Masters in Business Administration (Technology).

Forkin III joined Peabody in 2010 and was named Senior Vice President - Corporate Development and Strategy in November 2017.

He has executive responsibility for mergers and acquisitions, portfolio management, global strategy, U.S.

Frankcombe holds a Bachelor of Engineering (Mining) from University of Wollongong and a Master of Business Administration (Technology) from Deakin University.

Forkin III was named Chief Development Officer in July 2022 after serving as Senior Vice President - Corporate Development and Strategy since November 2017.

He leads global strategy, mergers and acquisitions, portfolio management, U.S.

thermal coal sales and renewable energy development.

Forkin has an extensive background in corporate finance, the energy industry, mergers and acquisitions and equity market research.

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

He has an extensive background in corporate finance, the energy industry, mergers and acquisitions and equity market research.

Prior to joining Peabody, Mr.

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However, because of extensive and comprehensive regulatory requirements, violations during mining operations occur from time to time in the industry.

Peabody Energy Corporation 2021 Form 10-K

Mine Safety and Health

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Black Lung (Coal Workers’ Pneumoconiosis)

Black Lung Benefits .

Under the U.S.

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The Affordable Care Act included 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.

Peabody Energy Corporation 2022 Form 10-K

The trust fund has been funded by an excise tax on U.S.

As a result of legislation enacted in December of 2020, the excise tax rates were set at 4.4% of the gross sales price not to exceed $1.10 per ton of underground coal and $0.55 per ton of surface coal for the year ending December 31, 2021.

As a result of legislation enacted in December 2020, the excise tax rates were set at 4.4% of the gross sales price not to exceed $1.10 per ton of underground coal and $0.55 per ton of surface coal for the year ending December 31, 2021.

This enacted legislation expired on December 31, 2021 and the excise tax rates reverted back to 2% of the gross sales price not to exceed $0.50 per ton of underground coal and $0.25 per ton of surface coal.

On December 2, 2021 the Government Accountability Office (GAO) published a report titled “Black Lung Benefits Program:

Continued Inaction on Coal Operator Self-Insurance Increases Financial Risk to Trust Fund.” This report notes that the Department of Labor (DOL) took some steps to improve its oversight of self-insured coal mine operators, but these efforts were complicated by the COVID-19 pandemic.

The GAO states in the report that the DOL has not taken necessary action to prevent additional benefit liabilities from being transferred to the trust fund and recommends that the DOL act on recommendations made in 2020.

Subsequently, the Office of Workers' Compensation Programs (OWCP) indicated that it plans to issue a Notice of Proposed Rulemaking in the upcoming months to update its regulations authorizing coal producers to self-insure and for determining appropriate security amounts, and that it plans to solicit public comments for that proposal.

A change in requirements for security posted to self-insure black lung liabilities could result in the Company being required to post additional security for its obligations.

OWCP recently requested the Company to refile its application for self-insurance.

Effective October 1, 2022, the excise tax rates reverted back to 4.4% of the gross sales price not to exceed $1.10 per ton of underground coal and $0.55 per ton of surface coal due to the enactment of the Inflation Reduction Act of 2022.

Peabody recognized expense related to the tax of $32.4 million, $51.5 million and $53.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

During the year ended December 31, 2022, Peabody recognized additional expense of approximately $8 million as a result of the higher excise tax rates.

Black Lung Benefits Act Self-Insurance Requirements .

The Black Lung Benefits Act requires each coal mine operator to secure the payment of its potential benefits liability by either qualifying as a self-insurer or by purchasing and maintaining a commercial insurance contract.

The Department of Labor’s (DOL) Office of Workers’ Compensation Programs (OWCP) is responsible for authorizing coal mine operators to self-insure and for setting the security amounts.

As part of its ongoing efforts to reform the self-insurance program to ensure that operators are adequately securing their liabilities, the OWCP proposed a rule in January 2023 to update its regulations for authorizing operators to self-insure and for determining appropriate security amounts.

The public comment period for the proposed rule ends March 20, 2023.

A change in requirements for security posted to self-insure black lung liabilities could result in the Company being required to post additional security for its obligations.

At the request of OWCP, the Company recently refiled its application for self-insurance.

Environmental Laws and Regulations

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

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

Peabody Energy Corporation 2021 Form 10-K

In Arizona, where Peabody performs reclamation work on tribal lands, the Company is regulated by the OSMRE because the tribes do not have SMCRA authorization.

SMCRA provides for three categories of bonds:

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The cost calculation for each bond must be completed according to the regulatory authority of each state or OSMRE.

The Company’s asset retirement obligations calculated in accordance with generally accepted accounting principles for its U.S.

The Company’s asset retirement obligations calculated in accordance with generally accepted accounting principles for its active and inactive U.S.

operations were $533.3 million as of December 31, 2022.

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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.

Peabody Energy Corporation 2022 Form 10-K

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

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The CAA requires the United States Environmental Protection Agency (EPA) to review national ambient air quality standards every five years to determine whether revision to current standards are appropriate.

As part of this recurring review process, the EPA in 2020 proposed to retain the ozone standards promulgated in 2015, including current secondary standards, and subsequently promulgated final standards to this effect.

Fifteen states and other petitioners have filed a petition for review of the rule in the United States Court of Appeals for the D.C.

As part of this recurring review process, the EPA in 2020 proposed to retain the ozone NAAQS promulgated in 2015, including both the primary (public health) and secondary (public welfare) standards.

The EPA subsequently promulgated final standards to this effect.

In 2021, fifteen states and other petitioners filed a petition for review of the rule in the United States Court of Appeals for the D.C.

Circuit (D.C.

The litigation is currently in abeyance following a motion filed by the EPA to allow for review of the standards.

The EPA also proposed in 2020 to retain the particulate matter (PM) standards last revised in 2012.

The EPA also proposed in 2020 to retain the particulate matter (PM) NAAQS last revised in 2012.

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.

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The case is currently in abeyance following a motion filed by the EPA to allow for review of the standards.

On January 6, 2023, the EPA proposed to lower the level of the annual PM 2.5 NAAQS from 12.0 ug /m 3 to within the range of 9.0 to 10.0 ug /m 3 .

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.

This could also be the case with respect to other NAAQS for nitrogen dioxide (NO 2 ) and sulfur dioxide (SO 2 ), although these standards are not subject to a statutorily-required review until 2023 for NO 2 and 2024 for SO 2.

Peabody Energy Corporation 2021 Form 10-K

Final NSPS for Fossil Fuel-Fired Electricity Utility Generating Units (EGUs) .

Final New Source Performance Standards (NSPS) for Fossil Fuel-Fired Electricity Utility Generating Units (EGUs) .

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.

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Reconstructed units must implement the most efficient generating technology based on the size of the unit (supercritical steam conditions for larger units, to meet a standard of 1,800 lb CO 2 /MWh-gross, and subcritical conditions for smaller units to meet a standard of 2,000 lb CO 2 /MWh-gross).

Peabody Energy Corporation 2022 Form 10-K

Numerous legal challenges to the final rule were filed in the D.C.

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

On October 23, 2015, the EPA published a final rule in the Federal Register regulating greenhouse gas emissions from existing fossil fuel-fired electric generation units (EGUs) under Section 111(d) of the CAA (80 Fed.

The rule (known as the Clean Power Plan or CPP) established emission guidelines for states to follow in developing plans to reduce greenhouse gas emissions from existing fossil fuel-fired EGUs.

On October 23, 2015, the EPA published a final rule in the Federal Register regulating greenhouse gas emissions from existing fossil fuel-fired EGUs under Section 111(d) of the CAA (80 Fed.

The rule (known as the Clean Power Plan or CPP) established emission guidelines for states to follow in developing plans to reduce greenhouse gas (GHG) emissions from existing fossil fuel-fired EGUs.

The CPP required that the states individually or collectively create systems that would reduce carbon emissions from any EGU located within their borders by 28% in 2025 and 32% in 2030 (compared with a 2005 baseline).

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

The ACE rule sets emissions guidelines for greenhouse gas emissions from existing EGUs based on a determination that efficiency heat rate improvements constitute the Best System of Emission Reduction (BSER).

The EPA’s final rule also revises certain regulations to give the states greater flexibility on the content and timing of their state plans.

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

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

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

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

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Circuit vacated and remanded the ACE Rule to the EPA, including its repeal of the CPP and amendments to the implementing regulations that extended the compliance timeline.

On October 29, 2021, the Supreme Court granted certiorari in four matters seeking review of the D.C.

On October 29, 2021, the Supreme Court of the United States (Supreme Court) granted certiorari in four consolidated matters seeking review of the D.C.

Circuit’s opinion vacating the ACE rule and invalidating the repeal of the CPP.

In granting certiorari, the Supreme Court consolidated the cases to consider the breadth of the EPA’s scope pursuant to 42 U.S.C.

Section 7411(d) of the CAA, specifically, issues pertaining to whether the EPA is limited to issuing standards for existing sources achievable through demonstrated technology and methods applied to such sources, or whether the EPA may also issue nationwide “performance standards” that can apply to the electric generation sector (such as cap and trade) which could effectively restructure the nation’s energy system.

The Company will continue to monitor the consolidated matters.

Peabody Energy Corporation 2021 Form 10-K

On June 30, 2022, the Supreme Court issued its opinion in West Virginia v.

The Supreme Court ruled that the EPA does not have Congressional authority under Section 111(d) of the CAA to limit emissions at existing power plants through generation shifting to other fuels and/or renewable energy, but still can regulate emissions at plants by emissions reductions technologies as the EPA has done in the past.

Circuit’s opinion was reversed and remanded, leaving neither the CPP or the ACE Rule in effect.

Thus, it will be necessary for the EPA to initiate new rulemaking in order to control GHG emissions from EGUs using section 111(d) of the CAA.

The EPA tentatively plans to propose emission guidelines for EGUs in 2023.

The Company will continue to monitor EPA rulemaking in this regard.

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

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Circuit on June 26, 2012.

On June 23, 2014, however, the U.S.

Supreme Court ruled that the EPA could not require PSD and Title V permitting for greenhouse gases emitted from stationary sources if those sources were not otherwise considered to be “major sources” of conventional pollutants for purposes of PSD and Title V (known as Step 2 sources).

On June 23, 2014, however, the Supreme Court ruled that the EPA could not require PSD and Title V permitting for greenhouse gases emitted from stationary sources if those sources were not otherwise considered to be “major sources” of conventional pollutants for purposes of PSD and Title V (known as Step 2 sources).

In accordance with that decision, the D.C.

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In 2016, the EPA published the final CSAPR Update Rule which imposed additional reductions in nitrogen oxides (NO x ) beginning in 2017 in 22 states subject to CSAPR.

In October 2020, the EPA proposed a rule to address a previous D.C.

Circuit remand of the CSAPR Update Rule and in April 2021, the EPA published a final rule in the Federal Register which imposed further reductions of NO x emissions in 12 states that were subject to the original 2016 rule.

This rule was subsequently remanded back to the EPA.

EPA , 938 F.3d 303.

Peabody Energy Corporation 2022 Form 10-K

In April 2021, the EPA published a final rule in the Federal Register to address the D.C.

Circuit remand.

This rule imposed further reductions of NO x emissions in 12 states that were subject to the original 2016 rule, which was based on the 2008 ozone NAAQS.

In the same rule, the EPA determined that 9 states did not significantly contribute to downwind nonattainment and/or maintenance issues and therefore did not require additional emission reductions.

In order to implement reductions in the 12 identified states, the EPA issued Federal Implementation Plans to lower state ozone season NO x budgets in 2021 to 2024, although limited emission trading can be used for compliance and states have the ability to replace federal plans with revised state plans that are no less stringent.

A petition for review challenging the 2021 rule has been filed in the D.C.

Circuit and briefing in this litigation commenced in November 2021, but this does not stay the effectiveness of the rule.

The EPA subsequently issued Federal Implementation Plans (FIPs) to lower state ozone season NO x budgets in 2021 to 2024 in the affected states.

A petition for review challenging the 2021 rule was filed in the D.C.

Briefing is completed and oral arguments were held September 28, 2022, but this does not stay the effectiveness of the rule.

On April 6, 2022, the EPA proposed FIPs to address regional ozone transport for the 2015 ozone NAAQS.

The proposed rule would result in new ozone season emission budgets for NO x in 25 states, including four Western states, and additionally contains provisions that would require daily “backstop” emission limits for coal-fired power plants over 100 megawatts.

The proposed rule would also set first-time limits on certain industrial sources.

The EPA estimates that by 2026 the compliance cost will be $1.1 billion.

These emission limitations would apply in addition to requirements contained in State Implementation Plans to control ozone precursors in affected states, although states have the option to replace these limits with equally strict or more stringent limitations.

Mercury and Air Toxic Standards (MATS) .

The EPA published the final MATS rule in the Federal Register in 2012.

The MATS rule revised the new source performance standards (NSPS) for NO x , SO 2 and PM for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants.

The MATS rule revised the NSPS for NO x , SO 2 and PM for new and modified coal-fueled electricity generating plants, and imposed maximum achievable control technology (MACT) emission limits on hazardous air pollutants (HAPs) from new and existing coal-fueled and oil-fueled electric generating plants.

MACT standards limit emissions of mercury, acid gas HAPs, non-mercury HAP metals and organic HAPs.

In 2020, the EPA issued a final rule reversing a prior finding and determined that it is not “appropriate and necessary” under the CAA to regulate HAP emissions from coal- and oil-fired power plants.

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

This rule also finalized residual risk and technology review standards for the coal- and oil-fired electricity utility generating units source category.

Both actions were challenged in the D.C.

Circuit but this litigation was placed in abeyance.

In 2021 EPA sent a draft rule to the Office of Management and Budget for review regarding reconsideration of the “appropriate and necessary” finding as well as residual risk and technology review standards for coal- and oil-fired EGUs.

On February 9, 2022 the EPA proposed a rule to revoke the 2020 finding and to reaffirm the agency’s 2016 finding that it remains “appropriate and necessary” to regulate HAP emissions from coal- and oil-fired power plants under Section 112 of the CAA.

In the same proposal, the EPA solicited comments on the performance and cost of new or improved technologies to control HAPs from these power plants as part of the agency’s review of related residual risk and technology review standards.

Regional Haze.

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States are required to revise plans every 10 years.

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 CAA’s PSD and Nonattainment New Source Review (NNSR) programs, generally referred to as NSR.

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 and the EPA has also taken steps to review and potentially revise previously issued rules and guidance, including those related to project emissions accounting and fugitive emissions.

PSD rules, guidance and memorandum may 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.

Peabody Energy Corporation 2022 Form 10-K

Federal Coal Leasing Moratorium .

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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.

Peabody Energy Corporation 2021 Form 10-K

Thereafter, environmental groups amended their complaint to challenge the Environmental Assessment and FONSI.

On August 12, 2022, the court invalidated the Environmental Assessment and FONSI and reinstated the moratorium until completion of a sufficient NEPA analysis.

The August 2022 decision is currently on appeal to the U.S.

Court of Appeals for the Ninth Circuit.

Clean Water Act (CWA) .

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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.

Although the EPA issued a final rule in 2020 that effectively could have in effect limited state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections in some circumstances, as a result of litigation developments this year, the 1971 certification rule is currently back in effect.

The EPA plans to issue another proposal in 2022 to update the 1971 rule.

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 prevention of significant deterioration (PSD) and Nonattainment New Source Review (NNSR) programs, generally referred to as NSR.

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.

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

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.

The EPA issued a final rule in 2020 that could limit state and tribal regulators’ authority by allowing the EPA to certify projects over state or tribal regulator objections in some circumstances.

That rule was temporarily vacated by a district court, but a Supreme Court order on April 7, 2022, effectively reinstated the rule.

The EPA issued another proposal in June 2022 that would supersede the 2020 rule and expand state and tribal regulators’ authority to review activities that require federal permits or licenses and to impose conditions they believe are necessary to ensure compliance with water quality requirements.

Comments for this rule were due August 8, 2022 and final rule is expected in early 2023.

CWA Definition of “Waters of the United States”.

In January 2020 the EPA and the Army Corps of Engineers (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.

In January 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.

On August 30, 2021, a federal court in Arizona vacated the Navigable Waters Protection Rule, and on September 3, 2021, the EPA and the Corps announced that they had “halted implementation” of the rule nationwide and that they are interpreting “Waters of the United States” consistent with the pre-2015 regulatory framework.

On December 7, 2021, the agencies published the first of two rulemaking proceedings to formally repeal the Navigable Waters Protection Rule, codify the pre-2015 regulatory framework, and then build upon that framework.

The agencies plan to issue the second proposal in 2022, but the exact timing is unclear.

On December 30, 2022, the agencies released the pre-publication version of a final rule that formally repeals the Navigable Waters Protection Rule and codifies a revised definition of “Waters of the United States” that is generally consistent with the pre-2015 regulatory framework that they are currently implementing.

The final rule was published in the Federal Register on January 18, 2023 and takes effect on March 20, 2023.

In addition, the Supreme Court is currently considering Sackett v.

21-454, a case involving the scope of federal regulatory authority over wetlands.

The Court heard oral arguments on October 3, 2022, and the opinion is forthcoming.

Depending on the outcome of that case, the agencies may need to revisit the most recent rulemaking.

Effluent Limitations Guidelines for the Steam Electric Power Generating Industry.

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However, on August 3, 2021, the EPA announced it is undertaking a supplemental rulemaking to “strengthen certain discharge limits” applicable to steam electric power plants.

The EPA expects to issue that proposal in early 2023.

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

Peabody Energy Corporation 2022 Form 10-K

National Environmental Policy Act (NEPA) .

National Environmental Policy Act .

NEPA, signed into law in 1970, requires federal agencies to review the environmental impacts of their decisions and issue either an environmental assessment or an environmental impact statement.

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

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

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

That final rule sought 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.

On October 7, 2021, however, CEQ published a proposed rule announcing a two-phase rulemaking process to generally restore the pre-2020 NEPA regulations before more broadly revisiting the 2020 rule.

On April 20, 2022, however, the CEQ published the final Phase 1 rule that partially amended the 2020 rule by restoring key provisions of the pre-2020 NEPA regulations.

The CEQ plans to propose a Phase 2 rule in the near future that makes broader changes to the 2020 rule.

Separately, the CEQ published NEPA Guidance on Consideration of Greenhouse Gas Emissions and Climate Change on January 9, 2023.

The interim guidance was effective immediately, though the agency is accepting comments on the guidance.

Resource Conservation and Recovery Act (RCRA) .

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

Although EPA had planned to finalize this rule in 2021, the EPA now expects to issue a final rule around October 2022.

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

Although EPA had planned to finalize this rule in 2021, the EPA now expects to issue a final rule around July 2023.

Separately, on August 28, 2020 and November 12, 2020, the EPA finalized two sets of 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.

Initially the EPA had planned to issue a proposal in mid-2021, but the EPA now expects to issue the proposal rule in September 2022.

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

The EPA expects to finalize additional revisions in August 2023.

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

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But in June 2021, agencies announced their plan to revise, rescind, or reinstate the rules that were finalized (or withdrawn) during the Trump Administration that conflict with the Biden Administration’s objectives.

The agencies plan to begin issuing proposed rules in mid-2023.

Peabody Energy Corporation 2022 Form 10-K

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

SEC Climate-Related Disclosures.

On March 21, 2022, the SEC proposed rules that would require public companies to disclose extensive climate-related information in certain SEC filings.

Specifically, the proposed rules would add new Subpart 1500 to Regulation S-K and new Article 14 to Regulation S-X to require disclosure of climate-related risks that are reasonably likely to have a material impact on a public company’s business, results of operations, or financial condition;

GHG emissions associated with a public company that includes, in many cases, an attestation report by a GHG emissions attestation provider;

and climate-related financial metrics to be included in a company’s audited financial statements.

The Company is currently assessing the potential impact of the proposed rules.

The public comment period on the proposed rules has concluded and final rules are expected in 2023.

Inflation Reduction Act of 2022 .

The Inflation Reduction Act of 2022 was signed into law on August 16, 2022.

Among its many provisions are programs that provide grants and other forms of direct and indirect financial assistance for the deployment of zero emission technologies as well as other actions that could affect energy markets and the future use of coal.

The Company is currently assessing the potential environmental impacts of the legislation.

Regulatory Matters — Australia

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Australian state governments also require coal companies to post deposits or give other security against land which is being used for mining, with those deposits being returned or security released after satisfactory reclamation is completed.

Fair Work Act.

In December 2022, the federal government passed The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, which amends the Fair Work Act.

The legislation introduces several changes to workplace laws in Australia including changes to enterprise agreement making and termination, to when industrial action can be taken and to access to multi-employer bargaining.

In addition, employers will no longer be able to employ individuals on a fixed-term contract for more than two years, and access to flexible working arrangements for employees has been expanded.

A number of measures aimed at addressing the gender pay gap have also been introduced.

New South Wales Coal Directions .

The State of New South Wales (NSW) enacted the Energy and Utilities Administration Amendment Act 2022 granting the State Premier and Minister for Energy the ability to issue directions in the event of a coal market price emergency (among other powers).

On December 22, 2022, the State Premier declared a coal market price emergency on the basis that the declaration was necessary to reduce the risk that increases in coal prices could contribute to an increase in electricity prices.

On December 23, 2022, Peabody and a number of other coal producers in NSW were issued with directions that require those coal producers to reserve and sell a portion of the coal produced to NSW power generators at a capped price until June 30, 2024.

On January 31, 2023, amended directions were issued.

The directions, as they currently stand, apply to the Wilpinjong Mine and also impose a number of additional reporting obligations with respect to coal produced from the Wilpinjong Mine.

However, the NSW government is in ongoing discussions with coal producers and power generators regarding issuing additional directions.

It is anticipated that these directions will not impact Wilpinjong Mine, but may require the reservation of coal at the Wambo Mines;

however, the nature and extent of those obligations and associated reporting requirements are still evolving and require further clarification from the NSW government.

Peabody Energy Corporation 2022 Form 10-K

Metropolitan Mine Stormwater Discharge.

Over the past two years, there has been significantly high rainfall in New South Wales, including unprecedented rain totals at the Metropolitan Mine site.

While stormwater collected at the mine site is managed through two sedimentation dams, at times the heavy rainfall has presented challenges with managing the significant volumes of stormwater, as the surface water management infrastructure has not had sufficient capacity.

As a result, on multiple occasions throughout 2021 and 2022 stormwater has been discharged from the mine site.

Metropolitan Collieries Pty Ltd (MCPL), a wholly-owned subsidiary of Peabody, removed accumulated material from the sedimentation dams to restore full site stormwater capacity by December 31, 2022 and has identified and is implementing additional controls for the management of sediment moving forward.

Despite the measures undertaken by MCPL to manage and improve the situation, the Environment Protection Authority is currently undertaking an investigation in relation to the discharges of sediment laden water from the mine site and a review process of the Metropolitan Mine’s environmental protection license.

The Environment Protection Authority is investigating potential offenses against the environmental protection legislation arising from the discharges.

Mining Tenements and Environmental .

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

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.

In February 2019, the New South Wales 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.

Minister for Planning ).

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The proposed development can only proceed once the biodiversity offset obligations have been satisfied.

Environment Protection and Biodiversity Conservation Amendment (Standards and Assurance) Bill 2021.

On February 25, 2021 the Commonwealth Government introduced the Environment Protection and Biodiversity Conservation Amendment (Standards and Assurance) Bill 2021 into Parliament, which proposes amendments to the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) following the release of the Final Report of the Independent Review of the Act undertaken by Professor Graeme Samuel (the Samuel Review) that made 38 recommendations for short and long-term reforms, and ultimately calls for a complete overhaul of the existing legislative framework by 2022, to be undertaken in several tranches, with a strong focus on the setting of National Environmental Standards, assurance and compliance, data availability and management, and indigenous engagement.

The bill responds to some of the recommendations for immediate reform made in the Samuel Review, and seeks to:

establish a framework for the making, varying, revoking and application of National Environmental Standards;

apply the National Environmental Standards to bilateral agreements with States and Territories;

and establish an Environment Assurance Commissioner to monitor and audit bilateral agreements and other processes under the EPBC Act.

The bill passed the Australian Parliament’s House of Representatives in June 2021 and is now under consideration by the Australian Senate.

Sharma v Minister for the Environment.

On March 15, 2022, the Full Court of the Federal Court of Australia overturned the decision in Sharma v Minister for the Environment [2021] FCA 560 (Sharma), a case which found in 2021 that the Federal Minister for the Environment had a duty to avoid causing personal injury or death to children in Australia as a result of carbon emissions when deciding an application to approve a coal mine expansion.

In light of this decision, the Minister for the Environment no longer must consider the effects of carbon emissions when assessing referrals under the Environment Protection and Biodiversity Conservation Act 1999.

However, an application by Sharma for special leave to appeal to the High Court of Australia remains probable, and the duty could be reinstated.

Peabody Energy Corporation 2022 Form 10-K

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Peabody’s mines provide financial assurance to the relevant authorities which is calculated in accordance with current regulatory requirements.

This financial assurance is in the form of cash, surety bonds or bank guarantees which are supported by a combination of cash collateral, deeds of indemnity and guarantee and letters of credit issued under the Company’s credit facility and accounts receivable securitization program.

The Company operates in both the Queensland and New South Wales state jurisdictions.

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The cost calculation for each bond must be completed according to the regulatory authority of each state.

The costs associated with the Company’s Australian asset retirement obligations are calculated in accordance with U.S.

generally accepted accounting principles and were $201.2 million as of December 31, 2021.

The Company’s asset retirement obligations calculated in accordance with U.S.

generally accepted accounting principles for its active and inactive Australian operations were $216.7 million as of December 31, 2022.

The total bonding requirements for the Company’s 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 states’ calculated cost of reclamation if a mine ceases to operate immediately as well as different costs assumptions.

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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.

Queensland Reclamation.

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The commencement date for the new FA framework was April 1, 2019 and there is a transitional period during which Peabody will move each of its mines in Queensland into the new FA framework.

Peabody Energy Corporation 2021 Form 10-K

The new progressive rehabilitation requirements commenced on November 1, 2019 and require each mine, within a three-year transitional period, to establish a schedule of rehabilitation milestones covering the life of the mine, and any significant changes to the timing of rehabilitation will require regulatory approval.

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The Company is of the view that there will not be a need to seek any further regulatory approvals for any of the NUMAs at any of its Queensland mines.

Peabody Energy Corporation 2022 Form 10-K

Residual Risks .

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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.

Federal Reclamation.

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.

The Committee was unable to reach unanimous agreement on a set of recommendations.

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

Native Title and Cultural Heritage .

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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 included 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;

The Senate Inquiry’s terms of reference included 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.

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The recommendations also include that a review of the Native Title Act 1993 (Cth) be undertaken to address inequalities in the negotiating position of Aboriginal and Torres Strait Islander peoples in the future act regime, including the ‘right to negotiate’ process which is associated with the grant of certain mining tenements.

On November 24, 2022, the Environment Minister announced the Australian government’s support for all but one of the recommendations from the Senate Inquiry (whether final responsibility for heritage protection should sit with the Indigenous Affairs Minister or the Environment Minister is still being assessed) and indicated laws to protect Aboriginal cultural heritage would be strengthened following a further review of mining standards.

Any legislation passed as a result of the recommendations in the final report could potentially impact the Company’s current and future mining tenements and operations.

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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.

Peabody Energy Corporation 2021 Form 10-K

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, a 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.

SWA have recommended exposure limits of 1.5 milligrams per cubic meter (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, a new workplace exposure standard for respirable crystalline silica (eight hour time-weighted average airborne concentration of 0.05mg/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.

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NSW is 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 which became enforceable on February 1, 2021.

In addition, as part of a broader review of workplace exposure standards, SWA is currently considering a proposal to reduce the time weighted average (TWA) Workplace Exposure Standard (WES) for carbon dioxide (CO 2 ) in Australian coal mines from 12,500 ppm to 5,000 ppm.

In addition, as part of a broader review of workplace exposure standards, SWA is currently considering a proposal to reduce the time weighted average (TWA) WES for CO 2 in Australian coal mines from 12,500 ppm to 5,000 ppm.

Currently there is a separate TWA for CO 2 in coal mines, however SWA proposes to remove this to align with a general industry standard.

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Importantly, a minimum three-year transition period applies for any change to standards.

SWA expects to make recommendations to the Work Health and Safety Ministers on the proposed workplace exposure standards in the first quarter of 2023.

Peabody Energy Corporation 2022 Form 10-K

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

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From the start of the 2020-21 compliance year, baselines must use prescribed production variables (an example being run of mine coal) and default emissions intensity values (being values set by the government to represent the industry average emissions intensity of production over five years) unless specific exemptions apply (such as a facility having site-specific values set).

On January 10, 2023, the Australian federal government released its Safeguard Mechanism Reforms Position Paper setting out the proposed changes to the emissions reduction regime.

The reforms will commence on July 1, 2023 utilizing site specific baseline emissions as benchmarks for year-on-year improvement (proposed to be 4.9% each year to 2030) before transitioning to industry average emissions benchmarks by 2030.

Proponents will earn tradeable credits (Safeguard Mechanism Credits) when emissions are below their baselines or can purchase credits to offset emissions.

Access to existing Australian Carbon Credit Units will continue unchanged albeit with a price ceiling of $75 Australian dollars per tonne of CO 2 in 2023-24, increasing with the Consumer Price Index plus 2% each year.

After further consultation, the Australian government aims to finalize the legislative amendments to implement the Safeguard Mechanism reforms by April 2023.

The potential impact of these reforms to Peabody’s Australian operations is under review.

Queensland Royalty .

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 $522,000 Australian dollars for the 2020-21 financial year and $713,000 Australian dollars for the 2019-20 financial year.

Peabody’s contribution is expected to further decrease in year three based on an expected reduction in production at its Queensland mines.

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 contributed to a Resource Community Infrastructure Fund (the Fund) over this three-year period.

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

Peabody’s contribution to the Fund was approximately $457,000 Australian dollars for the 2021-22 financial year, $522,000 Australian dollars for the 2020-21 financial year and $713,000 Australian dollars for the 2019-20 financial year.

On and from July 1, 2022, the Queensland government introduced three new royalty tiers for coal produced and sold from the state.

The new tier rates are 20% for the portion of prices above $175 Australian dollars per tonne;

30% for the portion of prices above $225 Australian dollars per tonne;

and a 40% tier for the portion of prices above $300 Australian dollars per tonne.

Previously, the maximum royalty rate was 15% of the value of the coal sold above $150 Australian dollars per tonne.

The change follows a three-year freeze on royalty rates for coal in the state.

Through December 31, 2022, the Company paid additional royalties of $69.9 million Australian dollars as a result of the new rates.

The increased rate structure may impact the Company’s future decisions about its Queensland operations.

Peabody Energy Corporation 2022 Form 10-K

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Sydney Water Catchment Areas .

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 the Company’s Metropolitan Mine.

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:

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

The Panel issued its final report in October 2019, which made findings and recommendations concerning mining activities and effects across the catchment as a whole.

In response to the Panel’s recommendations, in 2020 the DPE established an interagency taskforce to implement a detailed action plan which 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;

establishing a new independent expert panel (Independent Advisory Panel) to advise on future mining applications in the catchment;

strengthening surface and groundwater monitoring;

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

When requested by the DPE, the Independent Advisory Panel is available to provide informed technical advice to the DPE or the Independent Planning Commission in relation to development applications and post-approval matters relating to the assessment and management of subsidence impacts associated with underground mining across NSW, with a particular focus on risks to the quantity of water in the catchment.

The Independent Advisory Panel is comprised of an independent chair and experts in the fields of mining engineering and subsidence, surface water, groundwater and swamp hydrology and ecology.

Advice that may be provided by the Independent Advisory Panel may include, but is not confined to, risks to the total water quantity and holding capacity of surface and groundwater systems, including swamps and reservoirs, and the types and reliability of methodologies used to predict, monitor, assess and report on mining effects, impacts and consequences.

Risks Related to Global Climate Change

Peabody recognizes that climate change is occurring and that human activity, including the use of fossil fuels, contributes to greenhouse gas (GHG) emissions.

Peabody recognizes that climate change is occurring and that human activity, including the use of fossil fuels, contributes to GHG emissions.

The Company’s largest contribution to GHG emissions occurs indirectly, through the coal used by its customers in the generation of electricity and the production of steel (Scope 3).

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Management believes that the Company’s external communications, including environmental regulatory filings and public notices, U.S.

Securities and Exchange Commission filings, its annual Environmental, Social and Governance Report, its website and various other stakeholder-focused publications provide a comprehensive picture of the Company’s material risks and progress.

Securities and Exchange Commission filings, its annual Environmental, Social and Governance (ESG) Report, its website and various other stakeholder-focused publications provide a comprehensive picture of the Company’s material risks and progress.

All such communications are subject to oversight and review protocols established by Peabody’s board of directors and executive leadership team.

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While the Company faces numerous risks associated with the transition to a net-zero emissions economy and the physical impacts of climate change, certain opportunities may also emerge, such as:

• Heightened emphasis among multiple stakeholders to develop high-efficiency, low-emissions (HELE) technologies and carbon capture, use and storage (CCUS) technologies;

• Heightened emphasis among multiple stakeholders to develop high-efficiency, low-emissions (HELE) technologies and CCUS technologies;

• Increased steel demand related to construction and other infrastructure projects related to climate change concerns;

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Regulations Related to Global Climate Change

In the U.S., Congress has considered legislation addressing global climate issues and greenhouse gas emissions, but to date, no such legislation has been signed into law.

In the U.S., Congress has considered legislation addressing global climate issues and GHG emissions, but to date, no new comprehensive, regulatory legislation has been signed into law.

Congress, however, has approved legislation, the Inflation Reduction Act of 2022, that will provide substantial tax incentives, grants and loan guarantees for energy infrastructure, solar panels, wind turbines, nuclear and geothermal energy, hydrogen projects and carbon capture and storage.

While it is possible that the U.S.

will adopt legislation in the future, the timing and specific requirements of any such legislation are uncertain.

In the absence of new U.S.

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

will adopt additional climate legislation in the future, the timing and specific requirements of any such legislation are uncertain.

The EPA has also undertaken several steps to regulate GHG emissions under existing law, primarily the CAA.

In response to the 2007 U.S.

Supreme Court ruling in Massachusetts v.

EPA , the EPA commenced several rulemaking projects as described under “Regulatory Matters - U.S.” In particular, in 2015, the EPA announced final rules (known as the CPP) for regulating carbon dioxide emissions from existing and new fossil fuel-fired EGUs.

Twenty-seven states and governmental entities, as well as utilities, industry groups, trade associations, coal companies (including Peabody), and other entities, challenged the CPP in federal court.

Implementation of the CPP was stayed by the U.S.

Supreme Court pending resolution of its legal challenges.

In October 2017, the EPA proposed to change its legal interpretation of section 111(d) of the CAA, the authority that the agency relied on for the original CPP.

The EPA relied on the proposed reinterpretation until August 2018, when it proposed the Affordable Clean Energy Rule (the ACE Rule) to replace the CPP with a system where states would develop emissions reduction plans using BSER measures (essentially efficiency heat rate improvements), and the EPA would approve the state plans if they use EPA-approved candidate technologies.

Changes in the NSR program were also proposed to allow efficiency improvements to be made without triggering NSR requirements.

In September 2019, the ACE Rule, which provides states with the flexibility to regulate on a plant-by-plant basis with a focus on coal-fired EGUs, became effective and the CPP was repealed.

Proposed revisions to the regulations under the 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.

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

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.

EPA , the EPA commenced several rulemaking projects as described under “Regulatory Matters - U.S.” The EPA has indicated that it will continue these efforts and proceed with new regulations affecting GHG emissions from fossil fuel-fired electric generation, methane emissions from oil and gas production and carbon emissions from light and heavy-duty vehicles.

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

have adopted programs to regulate greenhouse gas emissions.

For example, 10 northeastern states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont) entered into the Regional Greenhouse Gas Initiative (RGGI) in 2005, and Pennsylvania is expected to join in 2022.

have adopted programs to regulate GHG emissions.

RGGI is a mandatory cap-and-trade program to cap regional carbon dioxide emissions from power plants.

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Of those five jurisdictions, only California and Quebec have adopted greenhouse gas cap-and-trade regulations to date and both programs have begun operating.

Many of the states and provinces that left WCI, RGGI and MGGRA, along with many that continue to participate, have joined the new North America 2050 initiative, which seeks to reduce greenhouse gas emissions and create economic opportunities in ways not limited to cap-and-trade programs.

Many of the states and provinces that left WCI, RGGI and MGGRA, along with many that continue to participate, have joined the new North America 2050 initiative, which seeks to reduce GHG emissions and create economic opportunities in ways not limited to cap-and-trade programs.

Several other U.S.

states have enacted legislation establishing greenhouse gas emissions reduction goals or requirements.

states have enacted legislation establishing GHG emissions reduction goals or requirements.

In addition, several states have enacted legislation or have in effect regulations requiring electricity suppliers to use renewable energy sources to generate a certain percentage of power or that provide financial incentives to electricity suppliers for using renewable energy sources.

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

Peabody Energy Corporation 2021 Form 10-K

Peabody participated in the Department of Energy’s Voluntary Reporting of Greenhouse Gases Program until its suspension in May 2011, and the Company regularly discloses information regarding its production-related emissions in its annual Environmental, Social and Governance Report.

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

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.

Peabody Energy Corporation 2022 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 GHG emission targets for developed nations.

signed the Kyoto Protocol but it has never been ratified by the U.S.

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During the UNFCCC conference in Paris, France in late 2015, an agreement was adopted calling for voluntary emissions reductions contributions after the second commitment period ends in 2020 (the Paris Agreement).

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.

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 GHG emissions.

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.

The plan was referred to as the National Energy Guarantee (NEG) and was aimed at changing the National Electricity Market and associated legislative framework.

The NEG was abandoned by the Australian government in September 2018.

Following the outcome of the federal election in May 2019, the federal government confirmed it will not revive the former NEG policy.

Instead, the government will pursue a new energy and climate change policy, which includes a $2 billion Australian dollars investment in projects to bring down Australia's greenhouse gas emissions.

The Climate Solutions Fund is an extension of the former Emissions Reduction Fund.

The government has confirmed that it remains committed to meeting Australia’s Paris Agreement targets but that the focus of energy policy will be on driving down electricity prices.

In June 2022, the new Australian federal government announced plans to legislate for a 43% reduction in Australia’s GHG emissions by 2030 and to introduce changes by mid-2023 that will require heavy emitting companies producing more than 100,000 tonnes of carbon emissions annually to accelerate their emissions reduction activities.

On September 13, 2022, the Australian government passed the Climate Change Act 2022 to set the GHG emissions reduction targets into law.

On January 10, 2023, the Australian federal government released its Safeguard Mechanism Reforms Position Paper setting out the proposed changes to the emissions reduction regime (legislated through the National Greenhouse and Energy Reporting Act 2007 (Cth) ).

Refer to the section “Regulatory Matters — Australia” within this Item 1 for discussion of the proposed reform.

Available Information

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What changed 10-K

Item 1. Business