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MINE SAFETY A CEO’s PERSPECTIVE

MINE SAFETY A CEO’s PERSPECTIVE. Queensland Mining Industry Health & Safety Conference AUGUST 2000 Robert D. Humphris. MISSION STATEMENT P eabody Resources Limited produces coal: S afety, P roductively, in an E nvironmentally responsible & C ost-competitive manner

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MINE SAFETY A CEO’s PERSPECTIVE

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  1. MINE SAFETY A CEO’s PERSPECTIVE Queensland Mining Industry Health & Safety Conference AUGUST 2000 Robert D. Humphris

  2. MISSION STATEMENT Peabody Resources Limited produces coal: Safety, Productively, in an Environmentally responsible & Cost-competitive manner while participating in the development of relatedopportunities that reflect its core strengths & build its future returns. VISION STATEMENT Peabody Resources Limited will strive “To be the most successful coal based company.”

  3. 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

  4. US Operations Diverse Portfolio of Operations Big Sky Caballo North Antelope/ Rochelle North Antelope/ Rochelle Federal No. 2 Seneca Hawthorn Dominion Terminals 30% Peabody HQ Lynnville Big Mountain No. 16 Lightfoot No. 2 Robin Hood No. 9 Harris No. 1 Rocklick Marissa Martwick Patriot & Freedom Gibraltar P&L Camp No. 1 & 11 Kayenta Black Mesa 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) Lee Ranch

  5. AUSTRALIAN OPERATIONS Peabody’s Production Base Tonnes 2000* (millions) Total Peabody’s TonnesShare Ravensworth/ Narama Mine 6.0 5.0 Warkworth Mine 6.1 2.7 Bengalla 4.0 1.6 Moura 5.53.0 Total 21.6 12.3 Northern Territory Export Queensland Western Gladstone Moura Australia Brisbane South Australia NSW Export • 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 Bengalla Narama Ravensworth Newcastle Warkworth Sydney Victoria *Tonnage represent PRL’s shares of joint ventures (50% Namara, 43.75% Warkworth, 40% Bengalla, 55% Moura)

  6. PEABODY RESOURCES LIMITED Undeveloped Deposits Domestic Mines Export Mines Contracting Coal Trading Ravensworth West PRL 100% 85Mt reserve low sulphurdomestic Ravensworth PRL 100% 4.0Mtpa until 2000 Warkworth PRL 43.75% 6.1Mtpa to 7.5Mtpa by 2005 Mining Services PRL 100% Contract Mining / Tunnelling and Highwall Mining Coal Trade Coal Trading Commencing in 2000 Narama PRL 50% 2.0Mtpa until 2012 Bengalla PRL 40% 4.0Mtpa 7.2Mtpa by 2004 Ravensworth East PRL 100% 1.7Mtpa 2001 - 2003 Moura PRL 55% Acquired Aug 1999 5.0Mtpa 5.5 Mtpa by 2002 Seam Gas PRL Corporate Structure

  7. 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

  8. 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

  9. 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 !

  10. 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

  11. WARKWORTH MINING LIMITEDSAFETY STATISTICS - JULY 2000 Current Business Prior Month Year 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

  12. Safety Statistics 4 week period ending 29/07/00

  13. 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

  14. 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

  15. 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

  16. 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 Assessment Development of Alcohol & Other Drugs Procedures P.A.S.S. Implementation Our 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

  17. PRL SAFETY SUMMIT 1999 Emergency Procedures - John Kay - Opening Address Bob Humphris - Guest Speaker Bill Bippus - Safety & Training Manager, Black Mesa & Kayenta Mines - Introduction to the Workshops Workshops Chairman - Afternoon Session - John Wasik Workshops Feedback Summary & Close Bob Humphris, John Wasik, Ian Craig, Allan Rossiter, Paul Davis, Roland Lee & Bill Bippus

  18. 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?

  19. 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

  20. 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

  21. CURRENT ISSUES • Aging Workforce • General Health - blood pressure - cholesterol - flexibility - body fat - skin cancers • Slips & Trips • Lower Back Problems

  22. Analysis of LTI - By Type TYPE OF INJURY - 1998 TYPE OF INJURY - 1999 36 29

  23. Over 1 Month 2 Weeks to 1 Month 1 to 2 Weeks 16.7% Analysis of LTI - By Duration DURATION OF INJURY - 1998 DURATION OF INJURY - 1999 30.6% Less Than 1 Week 50.0% 2.7%

  24. 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

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