Peabody Energy announced an extension of its Twentymile Mine in Colorado secured by 40 million tons in long-term coal supply agreements. The Twentymile extension is being developed to supply coal to power plants, industrial and export customers, including a 16 year agreement with the nearby Hayden Generating Station.

The project involves developing the new Twentymile Sage Creek portal in the existing Wadge coal seam and moving the longwall. The new portal will access an additional 105 million ton northern reserve block of high Btu, low sulfur coal. Permits are in place for development of the longwall panel, with development work expected to begin in May of 2012.

Longwall production is anticipated in the second half of 2015. The capital investment for the extension is expected to total approximately USD 200 million.

Mr Gregory H Boyce Peabody Energy chairman and CEO said that “Peabody’s 9 billion ton reserve base allows us to serve long term US customer demand as well as emerging export opportunities. This project builds upon nearly a half century of Peabody operations in Colorado and a valued customer relationship with the Hayden Station.”

Peabody’s Twentymile operation in Colorado created USD 730 million in direct and indirect economic benefits for the region this past year.

The Hayden Generating Station in Northwest Colorado produces 446 megawatts of electricity with two units, serving more than 335,000 consumers in the state. It is operated by Xcel Energy an investor owned utility that provides electricity in seven other Western and Midwestern states.