"It’s Safer To Work In A U.S. Coal Mine Than To Work In A Shopping Mall Or Supermarket" Featuring Jim Grech, Peabody

Today we had the very exciting and interesting opportunity to visit with Jim Grech, President and CEO of Peabody. Jim was appointed as CEO in June 2021 and brings more than 30 years of experience across the coal and natural resources space. His career includes leadership roles as CEO of Wolverine Fuels, President of Nexus Gas Transmission, EVP and CCO of CONSOL Energy, and Vice President of DTE Energy. Peabody, founded in 1883, is one of the leading coal producers in the U.S., operating 17 surface and underground mines across the U.S. and Australia. We were thrilled to hear Jim’s perspective on the evolving role of coal in both the U.S. and global energy markets.
 
In our conversation, Jim shares background on his decision to join Peabody during a period of financial and market uncertainty and outlines the company’s progress in recent years, including repayment of $1.5B in secured debt, reinstatement of a dividend and stock buyback program, and reinvestment in U.S. and Australian assets. We discuss how to motivate a coal workforce amid global anti-coal sentiment, Peabody’s asset footprint, the strategic importance of the Powder River Basin (PRB) and the untapped potential to export PRB coal to Asia, the advantages of U.S. coal relative to coal in other parts of the world, and the vast abundance of U.S. coal, with U.S. coal reserves containing more energy than any other nation holds in any single energy resource. We explore the distinctions between thermal and metallurgical coal, global coal demand and outlook, the longevity of coal infrastructure with new plants expected to operate for 30-50 years, the improved environmental footprint of modern coal plants and outdated misconceptions, coal’s role in poverty reduction and economic growth in developing nations, and the push to codify U.S. regulatory changes into legislation for permanence beyond changing administrations. Jim shares his perspective on coal’s role in grid stability and delivering lower, more stable electricity prices, state-level legislative trends supporting reliability requirements for coal plants, the current status and underutilization of the U.S. coal fleet, and renewed interest from industrial users and datacenters seeking long-term, dependable power sources. We examine investor trends including the emerging investor focus on international coal markets, international market dynamics and growth opportunities across metallurgical and thermal coal, and much more. We close by asking Jim for his top takeaway, and he highlights the importance of being open-minded about coal’s net benefits, particularly regarding its role in global energy access, industrial development, and improving standards of living. It was our pleasure to host Jim and we greatly enjoyed the discussion.
 
Mike Bradley opened the discussion by noting that bond, commodity and equity markets have largely roundtripped to their June 12th closing levels (prior to the Israeli strike on Iran). From a bond market perspective, the 10-year bond yield (~4.3%) has essentially roundtripped and traders are now focused on upcoming economic data. In crude markets, WTI spiked to a high of ~$78.50/bbl on Monday following the U.S. strike over the weekend of Iranian nuclear sites, but has since pulled back to ~$65/bbl amid reports of a “proposed” Iranian/Israeli ceasefire, which is ~$3/bbl lower than June 12th price levels and ~$5/bbl above June trading lows. From an Energy equity standpoint, Energy has also roundtripped and is now trading modestly below (~2%) June 12th levels as energy investors begin refocusing their attention on the 2H’25/1H’26 global oil surplus. From a broader market standpoint, the S&P 500 is now ~0.5% higher than June 12th levels and within 1% of all-time highs. Broader markets are now in the process of transitioning away from Mideast conflict back towards U.S. domestic policy. Mike concluded by noting that investors are beginning to refocus on the odds of Trump’