Peabody (NYSE: BTU) has released an update on its Centurion metallurgical coal mine development, showcasing an integrated mine plan with an estimated net present value of $1.6 billion. The company anticipates an average annual production of 4.7 million tons at a first quartile cost and a mine life of 25+ years.
As of September 30, 2024, Peabody has completed approximately $250 million of the anticipated $489 million of initial development capital to achieve longwall production in March 2026. With a benchmark price assumption of $210 per metric ton, Centurion is estimated to have a net present value of $1.6 billion and a 25 percent internal rate of return.
The development of Centurion is a strategic priority for Peabody, aimed at maximizing shareholder value and reweighting its portfolio and long-term cash flows to metallurgical coal. The company is positioning Centurion as a cornerstone metallurgical coal asset in its global coal portfolio, unlocking substantial, untapped reserves.
Centurion is expected to significantly enhance Peabody’s metallurgical coal production, with an average volume of 4.7 million tons per year at expected costs of $105 per ton over the mine's projected 25+ year lifespan. Furthermore, the project will reposition Peabody's metallurgical coal portfolio toward higher quality premium met coals.
The company has outlined its commitment to increasing shareholder value through a balanced approach of maximizing shareholder returns and developing Centurion, which provides increased optionality to tightening metallurgical coal markets.
Peabody's presentation on the Centurion project can be found on the investor section of its website.
Today the company's shares have moved 1.3% to a price of $27.11. For more information, read the company's full 8-K submission here.
