October 2014

Utilising Workforce Input Into

Longwall Equipment Design

Hunter Valley Longwall Conference

About Peabody Energy

● Operates the world’s largest coal mine - North Antelope Rochelle Mine

(NARM)

● Peabody overview

– 251.7 million tons sold in 2013 from operations, trading and brokerage

– $7 billion in revenues

– 8.3 billion tons of proven and probable reserves

● Customers on six continents

● 26 mines across U.S. and Australia

– 20 surface mines

– Seven underground mines

● Listed on New York Stock Exchange under symbol “BTU”

2 Wilpinjong Mine

Peabody’s Global Platform Serves Customers on Six Continents

Peabody Operates 26 Mines Across Australia and the United States

Essen

Beijing

Ulaanbaatar

Urumqi

Jakarta Balikpapan

New Delhi

Brisbane, QLD

Newcastle, NSW

London

(From U.S.)

St .Louis, MO

Singapore

Mining Operations and Trading

Sales Reserves

SPRB 135 3.4

Midwest 26 3.2

Southwest 16 0.5

Colorado 7 0.2

Australia 35 0.9

Trading 32 -

Total Tons 252 8.3

Million Billion

Reported 2013 sales volumes. Reserves based on 2013 10-K filing. Total sales and reserves variances are based on rounding calculations. Green

shading indicates countries served by Peabody.

(to Europe)

Operating Regions

Customers Served

Corporate Office

Regional Offices

Trading/Business

Development Offices

Coal Flows

3

About Peabody’s Australia Platform

4

10.1

9.3

7 – 8

14 –

15

12 –

13

22 –

25

~ 8

15 –

17

Metropolitan

Dalrymple Bay

Abbot

Point

Port Kembla

Queensland

New South Wales

Wilpinjong Wambo UG

Wambo OC

NCIG PWCS

Metallurgical Thermal Port

Burton North Goonyella

Millennium

Eaglefield Moorvale

Middlemount

Coppabella

● Australia is world’s fourth largest coal

producer behind China, USA

and India

● 60% of world’s seaborne

metallurgical coal supply

● Ports close to high-growth Asian

markets

– 70% of Australia’s metallurgical coal

exports and more than 94% of

thermal coal exports exported to

Asian region in 2010

● Strong skills base

● Excellent safety records,

innovation and standards

Peabody Energy Australia Underground Operations

Three underground longwall mines

– Wambo, Hunter Valley NSW: 250m wide Longwall 2-2.6 m thick

seam, Medium Propensity to Spontaneous Combustion.

– Metropolitan, Illawarra NSW: 150m wide Longwall 2.8-3.2 m

thick seam, Gas Drainage Required

– North Goonyella, Northern Bowen Basin Qld: 300m Wide LTCC

6.4 – 7.6 m thick seam, Gas Drainage and Medium Propensity to

Spontaneous Combustion.

● Recently installed two new kits of longwall equipment

and commenced production

● Longwall equipment over-hauls are a regular event and

also include workforce input to scope of work.

5

Collaboration – Is it necessary?

6

Peabody LW Planning and Review Process

Peabody has a structured longwall relocation planning and review process

– 12 weeks prior to relocation

– Formal agenda and routine process

– Includes input from all Peabody UG LW mines – including USA

– Review planning, schedule and risk areas

– New Equipment and O/haul schedule

Collaboration equation:

$ Value of collaboration > $ cost of collaboration

Peabody finds the value on Collaboration at Operations and Workforce Level

7

Get into the detail

LW Relocation Aspect

Access in extreme situations

Promote early intervention

8

Utilising Workforce Input

The Process – Early integration into the project is fundamental

Identify the Hazards and Frustrations with the current equipment - Structured approach

Up-load Hazards and Issues to Design Risk Assessment

Registering requirements with OEM

(Listing priority and “needs vs wants”)

OEM to develop possible solutions LW Team and crews to structure possible solutions

Gap Analyses or Variance Analyses of Solutions

Feedback to LW team and Crews

Check-off Appropriate OEM Solutions Work with OEM on Effective solution

Understand Costs and Project Impacts of desired Solutions OEM to Integrate Solutions and check

Approve Appropriate Solution

Monitor Budget and Schedule relative to changes

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Surface Compatibility Testing

Test “ALL” Aspects of Integration

● Dust Suppression Lighting during nights Shift 10

Workforce Input into LW Equipment Design

● Project schedule to identify key input opportunities and resources required. Hold points maybe required.

● Design Risk Assessment

– Operators and maintenance workers involvement – identify issues with current and historical equipment.

– Workforce members involved need to collaborate with other crews to ensure all common issues are tabled

– Use safety and reporting data to validate/prioritise

● Identification of issues only – OEM needs to own and be responsible for development and integration of solution.

challenge in this process – don’t become solutions bases too early in the process

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Workforce Input

Crew meetings to tease out all issues – Site LW team to own register of issues

1. Production operator issues

2. Maintenance tradesman requirement

3. Supervisor and LW team suggestions

4. New and emerging legislative requirements

● Account for seam particulars – grades + gate conditions

● Site LW Team have clear linkage into LW equipment delivery project team

● Site and project team will have conflicting schedules

Senior Management to monitor and ensure the collaboration process is embedded in the project

12

Production Operator Input

Tease Out the Issues ● What are the hazards with operating current equipment?

– How often is this hazard dealt with?

● Review safety and health incident records

● What current issues are preventing 90-100 cutting hrs/week

● Hazards or frustrating routine practises

Equipment Process

Mono-Rail System and Units Normal Production

Conveyor tail piece/bootend Face Straightening

BSL - Crusher Managing strata problems

Main-gate Servicing + Maintenance

Tail-gate Bolt-up

Shearer Relocation Activities

Experienced and trusted LW face workforce member or supervisor to facilitate engagement of crews

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Maintenance Team Input

New Generation Longwall Equipment

>10,000 t Pay Load >1,200 Hydraulic Cylinders

>10,000 Hoses >8 km Cables

● Review maintenance and services practices

– Bulk oil and lubrication system

● Evaluate safety incident records and compliance issues

– Change-out of large complex components

● Maintainability and access to frequently replaced parts and

consumables

– Filters and valves

● Access in poor or non-routine events

– PRS Isolation points in difficult ground conditions

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New LW Face Installation

Metropolitan - May 2014

● Lighting and Ergonomics 15

The Outcome of a Sound Process is Ownership

Value in collaboration

● Crews will own and take pride in equipment

● Improved operating standards + maintenance practises

Feedback is key

● Proto-type testing is a critical hold point but too late for

identifying basic issues

● OEM needs to be responsible for design and integration

of any changes

● At no stage should the mine/operator become

responsible for design

Input is imperative in ensuring true “fit for purpose”

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Peabody Key Learning’s

Early engagement of workforce in design and layout aspects of longwall equipment is paramount in the delivery of a safe, highly productive and reliable set of LW equipment or over-haul.

– Structural integrity of flippers

– Walkways and ergonomics (viewing points at MG and TG)

– Main-gate access and supervisor access to tail-gate

– Electrical and hydraulic isolation points and processes

– Face lighting and communications – testing completed during night at OEM’s facility.

– Consideration of relocation aspects – adding value

● Future Improvements

– Greater consideration of gas management and goaf fringe

– Testing of sprays and dust suppression during compatibility

– More rigorous evaluation of access to facilities in non-routine conditions

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Improving – More to do in this space

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Conclusions

● Peabody has a robust LW relocation planning and review

process. This includes:

– Implementation of new LW equipment

– LW equipment overhauls including up-grades and improvement

evaluation

– Identification of risks and high exposure activities

– Sharing of learning’s or similar challenges

Value >>> Cost to facilitate sessions

● Structured quality input from the workforce is key to

acceptance of new equipment

Quality is remembered long after price is forgotten

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