Peabody reworks corporate structure due to recent growth

Peabody Energy (NYSE:BTU), the largest coal producer in the U.S., said March 7 that it is realigning itself into a new global organizational structure, with the creation of geographic business units in the Americas, Australia and Asia to reflect the growing size and scope of Peabody’s global footprint.

Some of this realignment is spurred by the fact that the St. Louis-based company in 2011 acquired Macarthur Coal, an independent coal company in Australia. That deal included two operating mines, a 50% equity-affiliate joint venture arrangement and several development projects, along with coal reserves of approximately 213 million tons.

In the realignment:

  • Richard Navarre has been named President – Americas. Navarre has nearly 30 years of experience including 19 years with Peabody, where he helped build out the U.S. and global business. He most recently was President and Chief Commercial Officer and has held a number of other executive positions including CFO.
  • Eric Ford has been named President – Australia, located in Brisbane. Ford has 41 years of international management experience, including 10 years managing Australian operations. He most recently served as Peabody’s Executive Vice President and COO.
  • Chris Hagedorn has been named President – Asia and Coal Trading. He most recently served as Peabody’s Senior Vice President of Global Sales and Trading Support, and he also has led Peabody’s Supply Chain Management and Business Performance functions.

Peabody Energy Chairman and CEO Gregory Boyce said this new organization would advance the company’s focus on operational excellence, the integration of newly acquired assets, the delivery of organic growth projects, and capital discipline and deleveraging. “With our recent acquisition, the size of our global platform has grown significantly and reached a logical point to bring a greater business focus at geographic and market levels, while maintaining controls and key centralized functions at the corporate level,” he added.

“As the largest global pure-play coal investment, Peabody has a growing platform in Australia, multiple initiatives in Asia, an expanding coal trading business and the premier portfolio in the United States,” said Boyce. “With major international and U.S. operations and sales and trading activities, it is a natural evolution to refocus our resources and talents to deliver enhanced results across our global platform.”

In addition to the business unit presidents, continuing to report to Boyce are central corporate functions including: Michael Crews, Executive Vice President and CFO; Sharon Fiehler, Executive Vice President and Chief Administrative Officer; Jeane Hull, Executive Vice President of Technical Services; Alexander Schoch, Executive Vice President of Law, Chief Legal Officer and Secretary; and Fredrick Palmer, Senior Vice President of Government Relations.

Peabody said it achieved record financial results in 2011, including sales of 251 million tons of coal, $8bn of revenues and EBITDA of $2.13bn. The company’s Australia operations contributed half of the earnings and continued to expand, while Peabody’s leading U.S. mining operations also contributed 50% and Asia initiatives continued to advance.

In 2011, the largest U.S. coal mine was Peabody’s North Antelope Rochelle operation in the Wyoming Powder River Basin. Peabody has an extensive network of coal mines in the West and Midwest, though it got out of the Appalachian coal production business a few years ago with the spin-off of Patriot Coal (NYSE:PCX). It owns interests in 30 coal mining operations, including a majority interest in 29 coal operations located in the U.S. and Australia and a 50% equity interest in the Middlemount mine in Australia. It also owns an equity interest in a joint venture mining operation in Venezuela. In addition to its mining operations, Peabody markets, brokers and trades third-party coal production through its Trading and Brokerage segment.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.