Peabody Energy is planning to extend its Twentymile Coal Mine in Colorado, US.

The move was taken after the company secured long-term coal supply agreements amounting to 40Mt. Peabody Energy said it will invest a total of $200m in the extension of the mine.

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Peabody Energy Chairman and CEO Gregory H Boyce said that Peabody’s 9 billion tonne reserve base allows the company 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," said Boyce.

As part of the extension, the company will develop the new Twentymile Sage Creek portal in the existing Wadge coal seam and move the longwall. The new portal will enable the access of an additional 105Mt, northern reserve block of high-Btu, low-sulfur coal.

The company has secured permits for the development of the longwall panel, with development work expected to begin in May 2012.
Longwall production is expected in the second half of 2015.

The coal mine 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.

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The Hayden Generating Station in north-west Colorado produces 446MW of electricity with two units, serving more than 335,000 consumers in the state. The facility is operated by Xcel Energy, an investor-owned utility that provides electricity to seven other western and mid-western states.