Peabody Coal signs sweetheart deal with government to expand existing mine
Yesterday, Peabody Coal signed a deal with the Department of the Interior’s Bureau of Land Management (BLM) to lease an additional 400 acres at its Twentymile Mine in northwest Colorado. Peabody will be paying 25 cents for each ton of coal; there are an estimated 3.2 million tons in the expanded tract.
Coal from the nearby Uinta Basin with similar characteristics (like energy yield and sodium content) sells for $35.60 per ton. Safe to assume that the Twentymile coal will sell at a similar price.
Which means that for each ton of coal Peabody sells, the company is netting $35.35. This isn’t profit — the company has to extract it, pay for machinery and miners, etc. But over the course of extracting that 3.2 million tons of coal, the company has $113,120,000 from which to eke out a profit.
$10.2 million of that will go to pay the CEO’s salary. Another chunk will go to to pay Senior Vice President Vic Svec, who said this about a court ruling this week that struck down an air-pollution rule targeting coal-fired power plants:
This ruling is an appropriate reversal of regulatory overreach by the EPA, which we’ve seen on a number of fronts.
Yes, clearly the government’s “war on coal” is hobbling the ability of Peabody’s executives to put food on the table. Next time, maybe the BLM can pay you to mine all that coal, and then send you a formal written apology for making it so hard to earn a buck.