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Other Events | 3 Months Ended
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Mar. 31, 2019
Other Events [Abstract] |
Other Events | Other Events North Goonyella The Company’s North Goonyella Mine in Queensland, Australia experienced a fire in a portion of the mine during September 2018. Mining operations have been suspended since September 2018. No mine personnel were physically harmed by the September 2018 events. On November 13, 2018, the Queensland Mine Inspectorate (QMI) initiated an investigation into the events that occurred at the mine to determine the cause of the event, assess the response to it and make recommendations to reduce the possibility of future incidents and improve response. The Company is currently complying with administrative requests from the QMI following a thorough review. During the first quarter of 2019, the Company completed segmenting of the mine into multiple zones to facilitate a phased re-ventilation and re-entry of the mine. In addition, all physical activities in advance of re-ventilating the first segment of the mine were completed. During the year ended December 31, 2018, the Company recorded $58.0 million in containment and idling costs related to the events at North Goonyella and a provision of $66.4 million for expected equipment losses. During the three months ended March 31, 2019, the Company recorded an additional $36.9 million in containment and idling costs, and an additional provision of $24.7 million related to equipment losses as more information became available. The combined provision includes $50.7 million for the estimated cost to replace leased equipment, $23.2 million related to the cost of Company-owned equipment and $17.2 million of other charges, which represents the best estimate of potential loss based on the assessments made to date. In the event that no future mining occurs at the North Goonyella Mine, the Company may record additional charges for the remaining carrying value of the North Goonyella Mine and additional leased equipment of approximately $275 million and $10 million, respectively. Incremental exposures above the aforementioned include take-or-pay obligations and other costs associated with idling or closing the mine. In March 2019, the Company entered into an insurance claim settlement agreement with its insurers and various re-insurers under a combined property damage and business interruption policy and recorded a $125 million insurance recovery, the maximum amount available under the policy above a $50 million deductible. The Company collected $8.1 million of the recovery during March 2019 and the remainder subsequent to March 31, 2019. On April 30, 2019, Peabody (Bowen) Pty Ltd entered into an option exercise and release agreement with Yancoal Technology Development Pty Ltd pursuant to which Peabody (Bowen) Pty Ltd exercised an option to acquire from Yancoal Technology Development Pty Ltd the longwall mining equipment used under license at the North Goonyella Mine for $54.2 million, which was consistent with the Company’s provision for equipment losses for the related impaired assets at March 31, 2019. Divestitures In June 2018, Peabody entered into an agreement to sell approximately 23 million tonnes of metallurgical coal resources adjacent to its Millennium Mine to Stanmore Coal Limited (Stanmore) for approximately $22 million. The sale was completed in July 2018. During the three months ended March 31, 2019, Stanmore paid Peabody approximately $7 million, which brought the remaining receivable balance to approximately $7 million as of March 31, 2019. The remaining receivable balance, which will be paid over the subsequent four months, is included in “Accounts receivable, net” in the accompanying condensed consolidated balance sheet. On February 6, 2018, the Company sold its 50% interest in the Red Mountain Joint Venture (RMJV) with BHP Billiton Mitsui Coal Pty Ltd (BMC) for $20.0 million and recorded a gain of $7.1 million, which is included within “Net gain on disposals” in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2018. RMJV operated the coal handling and preparation plant utilized by the Company’s Millennium Mine. BMC assumed the reclamation obligations and other commitments associated with the assets of RMJV. The Millennium Mine will have continued usage of the coal handling and preparation plant and the associated rail loading facility until the end of 2019 via a coal washing take-or-pay agreement with BMC. In January 2018, Peabody entered into an agreement to sell its share in certain surplus land assets in Queensland’s Bowen Basin to Pembroke Resources South Pty Ltd for approximately $37 million Australian dollars, net of transaction costs. The necessary approval of the Australian Foreign Investment Review Board to complete the transaction was received on March 29, 2018, satisfying all the conditions precedent to the sale, and the Company recorded a gain of $20.6 million, which is included within “Net gain on disposals” in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 2018. Joint Venture In 2014, the Company agreed to establish an unincorporated joint venture project with Glencore plc (Glencore), in which the Company holds a 50% interest, to combine the existing operations of the Company’s Wambo Open-Cut Mine in Australia with the adjacent coal reserves of Glencore’s United Mine. The Company expects the project to result in several operational synergies, including improved mining productivity, lower per-unit operating costs and an extended mine life. The joint venture is expected to be formed during 2019, subject to substantive contingencies for the requisite regulatory and permitting approvals. At such time as control over the existing operations is exchanged, the Company will account for its interest in the combined operations at fair value.

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