MINE SAFETY A CEO’s PERSPECTIVE

Queensland Mining IndustryHealth & Safety Conference

AUGUST 2000

Robert D. Humphris

MISSION STATEMENT

Peabody Resources Limited produces coal:

Safety, Productively, in anEnvironmentally responsible &Cost-competitive manner

while participating in the development of related opportunities that reflect its core strengths & build its future returns.

VISION STATEMENT

Peabody Resources Limited will strive “To be the most successful coal based company.”

PEABODY OVERVIEW

World’s largest coal company– No. 1 in the U.S., top 5 in Australia– 176 million tons sold in fiscal year 1999– Leader in innovative coal & emissions allowance trading & coal

contract restructuring

Large customer base– Serves more than 180 North American generating plants– Fuels more than 9% of U.S. electricity– Fuels 2.5% of world electricity

Top 10 U.S. power marketer– Leader in power contract restructuring– Provider of risk management services

US Operations

Diverse Portfolio of Operations

North Antelope/Rochelle

Big Sky

North Antelope/Rochelle

Seneca

KayentaBlack Mesa

Lee Ranch

Camp No. 1 & 11Patriot & Freedom

Martwick

Lynnville

Hawthorn

Federal No. 2

Big Mountain No. 16Lightfoot No. 2Robin Hood No. 9Harris No. 1Rocklick

MarissaPeabody HQ

Dominion Terminals 30%

Gibraltar P&L

Black Beauty Mines (82%)Air Quality (IN)Columbia (IN)Enterprise (IN)Farmersburg (IN)Francisco (IN)Miller Creek (IN)Somerville North (IN)Viking (IN)Westfork (IN)Big Ridge (Arclar) (IL)Wildcat Hills (IL)Eagle Valley (IL)Riola No. 1 (IL)Riola No. 2 (IL)

Caballo

AUSTRALIAN OPERATIONS

Queensland

NSW

NorthernTerritory

WesternAustralia

SouthAustralia

Victoria

BengallaRavensworth Narama

Warkworth

Export

Newcastle

Brisbane

Sydney

Peabody’s Production BaseTonnes 2000*

(millions)

Total Peabody’s Tonnes ShareRavensworth/Narama Mine 6.0 5.0Warkworth Mine 6.1 2.7Bengalla 4.0 1.6Moura 5.5 3.0 Total 21.6 12.3

6 million tonne/year Bengalla Mine opened April 1999

Serves Taiwan, Japan, Korea, China & India

Serves Macquarie Generation in NSW

Acquired 5.5 million tonne/year Moura Mine in August 1999*Tonnage represent PRL’s shares of joint ventures

(50% Namara, 43.75% Warkworth, 40% Bengalla, 55% Moura)

MouraGladstone

Export

PRL Corporate Structure

PEABODY RESOURCES LIMITED

Coal

Trading

Domestic

Mines

Export

Mines

ContractingUndeveloped

Deposits

Ravensworth WestPRL 100%

85Mt reservelow sulphur domestic

Ravensworth

PRL 100%

4.0Mtpa

until 2000

Warkworth

PRL 43.75%

6.1Mtpa to

7.5Mtpa by 2005

Mining ServicesPRL 100%

Contract Mining /Tunnelling andHighwall Mining

Coal Trade

Coal Trading

Commencing

in 2000

Bengalla

PRL 40%

4.0Mtpa

7.2Mtpa by 2004

MouraPRL 55%

Acquired Aug 19995.0Mtpa

5.5 Mtpa by 2002Seam Gas

Narama

PRL 50%

2.0Mtpa

until 2012

Ravensworth EastPRL 100%

1.7Mtpa

2001 - 2003

SAFETY VISION STATEMENT

Peabody Resources Limited has a continuing corporate commitment to be a leader in health and safety.

We will achieve this by:

leadership in the areas of health and safety management empowering people within the business units to own and action health and safety issues recognising individual and team achievements encouraging teamwork to achieve continuous improvement undertaking an annual corporate review of our progress

PERSONAL VIEWPOINT

GOOD SAFETY = MORAL OBLIGATION + GOOD BUSINESS

MORAL OBLIGATION

“At Peabody we would like all our employees and their families to truly believe that they are entitled to return home to their families in the same good health that they went to work”

GOOD BUSINESS

- Lower Workers Comp- Reduced Overtime- Business Opportunities- Community Perceptions

Peabody Resources Limited a holding company

Business Units are totally autonomous businesses with separate boards (in most areas)

THE THREE C’s

Coach Counsel Count / Control the Money !

PRL’s CORPORATE ROLE

1. Safety to be top of the Agenda at any reporting session

2. Safety Statistics to be prepared in a common format

3. All business units to use a management system and audit

4. Ensure appropriately structured incentive schemes

5. Annual Corporate Review through PRL Safety Summit

6. Common Safety reporting system

WARKWORTH MINING LIMITEDSAFETY STATISTICS - JULY 2000

Current Business Prior MonthYear to Business Date Year

Average Number of Employees 386 385 387 Total Hours Worked 74,822 303,840 902,640 Injury/Damage/Potential Accident Reports 60 224 437 First Aid Treatments 28 130 332 Medical Treatments 3 6 24 Medical Treatments - Contractors 0 0 1 Medical Treatment Frequency Rate 40 20 27 Lost Time Injuries 1 2 10 Lost Time Injury Frequency Rate 13 7 11 Lost Time Injury Severity Rate 53 36 675 Lost Time Injury Duration Rate 4 6 61

Safety StatisticsSafety Statistics4 week period ending 29/07/004 week period ending 29/07/00

Industry Standard Basis Total Site

CurrentMonth

BusinessYear To

Date

PriorYear

*

CurrentMonth

BusinessYear To

Date

PriorYear

Average No. of Employees 123 124 107 170 192 204

Total Hours Worked 22,140 96,210 254,295 29,868 143,471 445,961

Injury / Damage/ Potential Hazard Reports 16 61 180 16 64 200

First Aid Treatments 0 4 14 0 6 23

Medical Treatments 0 0 2 0 0 4

Medical Treatment Frequency Rate (MTFR) 0 0 7.9 0 0 9.0

Lost time Injuries (LTI’s) 0 0 0 0 0 0

LTI Frequency rate (LTIFR) 0 0 0 0 0 0

LTI Severity Rate 0 0 0 0 0 0

LTI Duration Rate 0 0 0 0 0 0

PRL’s CORPORATE ROLE

1. Safety to be top of the Agenda at any reporting session

2. Safety Statistics to be prepared in a common format

3. All business units to use a management system and audit

4. Ensure appropriately structured incentive schemes

5. Annual Corporate Review through PRL Safety Summit

6. Common Safety reporting system

MANAGEMENT SYSTEMS & AUDIT

RAVENSWORTH - NSCA 5 STAR Audit - Self

- Risk Management Solutions

WARKWORTH - NSCA 5 STAR + Audit

BENGALLA - NOSA + Audit

MOURA - Developing Management Systems- Evaluating NOSA and NSCA

MINING SERVICES - ICSRS - International Contractors Safety Rating System (US)

- Audit - DNV

PRL’s CORPORATE ROLE

1. Safety to be top of the Agenda at any reporting session

2. Safety Statistics to be prepared in a common format

3. All business units to use a management system and audit

4. Ensure appropriately structured incentive schemes

5. Annual Corporate Review through PRL Safety Summit

6. Common Safety reporting system

PRL SAFETY SUMMIT 1998

Opening Address

Bob Humphris: Peabody Safety Performance - An Overview of the last 12 months. The Need for Change, Why is it Important ?

Guest Speaker

The Hon. Bob Martin, Minister for Mineral Resources

Presentations The Bengalla Approach to Risk AssessmentDevelopment of Alcohol & Other Drugs ProceduresP.A.S.S. ImplementationOur New Accident/Incident Reporting System New OH&S Performance Indicators, What are we Changing to & Why ?Healthy Lifestyle - Personal Accountability vs Why Should I Worry, the Company is

Accountable

Summary & Close - Bob Humphris

PRL SAFETY SUMMIT 1999

Emergency Procedures - John Kay

- Opening AddressBob Humphris

- Guest SpeakerBill Bippus - Safety & Training Manager, Black Mesa & Kayenta Mines

- Introduction to the Workshops

WorkshopsChairman - Afternoon Session - John Wasik

Workshops Feedback

Summary & Close

Bob Humphris, John Wasik, Ian Craig, Allan Rossiter, Paul Davis, Roland Lee & Bill Bippus

PRL SAFETY SUMMIT 1999continued

WORKSHOP OBJECTIVES:

• To share information• To challenge some ideas• To promote fresh thinking• To involve summit participants

QUESTIONS TO BE ANSWERED:

1. What have we learned from the guest speakers presentation?What are they doing in the US that has had an impact on health & safety?

2. From this list is their anything which we should consider for implementation on our site?Is there anything we believe we can do better?Is there anything we believe we should start doing?Is there anything we believe we should stop doing?

OPTIONAL QUESTIONS

3. Is there anything we are doing on our site that we want to share with the summit?4. What are we going to do to share the learnings from this workshop with others on our site?5. How can we make this summit better next year?

PRL’s CORPORATE ROLE

1. Safety to be top of the Agenda at any reporting session

2. Safety Statistics to be prepared in a common format

3. All business units to use a management system and audit

4. Ensure appropriately structured incentive schemes

5. Annual Corporate Review through PRL Safety Summit

6. Common Safety reporting system

SAFETY REPORTING SYSTEM

Lotus Notes Accident Data Base

Across all business units

All injury/damage/potential hazards

Reports compiled by operators/technicians/team leaders

Feedback - various

CURRENT ISSUES

Aging Workforce

General Health - blood pressure- cholesterol- flexibility- body fat- skin cancers

Slips & Trips

Lower Back Problems

Analysis of LTI - By Type

TYPE OF INJURY - 1998

TYPE OF INJURY - 1999

Back31%

Shoulder16%

Other32%

Broken Bones

8%Knee13%

Back39%Broken

Bones11%

Knee25%

Other17%

Shoulder8%

36 29

Analysis of LTI - By Duration

DURATION OF INJURY - 1999Less

Than 1 Week35%

2 Weeks to 1

Month19%

Over 1 Month38%

1 to 2 Weeks

8%

DURATION OF INJURY - 1998

Less Than 1 Week

Over 1 Month

2 Weeks to 1

Month

1 to 2 Weeks16.7%

50.0%

2.7%

30.6%

SOME OF OUR ACHIEVEMENTS

Drug and Alcohol Policies

Innovations - quieter machines- dragline bucket manipulator- truck access (pull-down ladders)- conveyor roller changeout (award recognition)- hydraulic truck seats (award recognition)

Safety Activity Days/Healthy Lifestyle Presentation

MINEX Process

Awards - Open Cut Mines Rescue- Sentinels of Safety

Bengalla 761 days LTI free and culture