February 20, 2014Arshad SayedPresident – Mongolia & India Peabody Energy

Global Coal Markets and Implications for Mongolia

COAL MONGOLIA

Reported 2012 sales volumes in millions of tons. Reserves based on 2012 10-K filing in billions of tons. * Total sales include sales sourced from third parties via Trading & Brokerage.

International OfficesSt. Louis New DelhiBrisbane BeijingNewcastle UrumqiLondon SingaporeUlaanbaatar JakartaEssen Balikpapan

Essen

London

Beijing

Ulaanbaatar

UrumqiSt .Louis

Singapore

Jakarta

DTA

NCIG

Balikpapan

New Delhi

Peabody’s Global Platform Provides Growth and Earnings Diversification

2

Mining OperationsPosition Sales* Reserves

SPRB 1 141 3.6Midwest 1 30 3.4 Southwest 1 17 1.0Colorado 1 8 0.2Australia 3 40 1.1

World’s Only Global Pure-Play Coal Investment

Overview of Peabody Energy

● The world’s largest private-sectorcoal company– 252 million tons sold in 2013– $7 billion in revenues

● Customers on six continents● 28 mines

– Surface/underground – U.S. and Australia

● Listed on New York Stock Exchange under the symbol “BTU”

● “Fortune 500” and “S&P 500” ranking

3

Open-Cut Mining Expertise

● Peabody is the largest producer of open-cut mined coal in North America

– 89% of Peabody’s volumes sold were from open-cut mines

– 141 million tons were produced from Peabody’s three mines in the Southern Powder River Basin

– 21 open-cut mines in operation globally

● Peabody optimizes production using multiple mining methods

– Cast blasting

– Draglines with dozer assist

– Truck and shovel with dozer assist

● Surface operations typically recover 90% to 96% of seams mined

4

Key Discussion Themes

● Global demand for coal continues to grow ● Advanced coal generation key to achieving

energy, economic, environmental objectives ● Adopting the principles of 21st century coal will

ensure that Mongolia’s coal sector is globally competitive

5

Demand for Coal Continues to Grow

0

1 500

3 000

4 500

6 000

7 500

9 000

2013E 2014P 2016PROW China India

Annual World Coal Use Expected to Grow700 Million Tonnes Over Next Three Years

● Record global coal use expected to continue on growing electricity and steel demand

● New coal-fueled generation of ~250 GW expected by 2016

● Coal increasingly converted to gas in Asia

● China and India drive nearly 80% of global demand growth

Source: Peabody Global Analytics.

Expected Global Coal Demand(Tonnes in Millions)

2,9253,075

4,5704,130

890780

7,8358,535

8,055

2,950

4,295

810

7

Metallurgical Coal Fundamentals Projected to Improve in 2014

● Mongolia projected to play key role in global met coal export picture, especially through growing Chinese import demand

● China becomes largest metallurgical coal importer; Rising costs, declining domestic quality support additional imports

● Global met coal pricing constrained on higher seaborne metallurgical supplies in 2013

● Demand growth expected to exceed supply increases in 2014 with slowdown of new projects and closure of high-cost mines

● Seaborne metallurgical coal demand expected to grow 10 – 15% through 2016

Rising Global Steel Demand from Industrialization and Urbanization

8

Source: Peabody Global Analytics.

China, India Account for 80% of Projected Global Coal Demand Growth

● Record coal imports in 2013– ~320 million tonnes in China– ~170 million tonnes in India

● China and India coal imports expected to grow ~100 million tonnes by 2016

● Significant new coal generation driving demand– ~110 GW in China– ~45 GW in India

● China closing marginal cost production – Costs rising >10% per year

● New port projects underway to enable greater imports

Source: Peabody Global Analytics, China Customs, India Market Watch.

China and India Coal Imports(Tonnes in Millions)

0

100

200

300

400

India China

185220

168

380

327345

2016

P

2014

P

2013

E

9

Shenzhen is Case Study in Urbanization Driving Demand

Circa 1980

From Sleepy Fishing Village to Mega City of 10+ Million People

10

11

Technologies Key to Energy, Economic, Environmental Goals

GreenGen Power Plant and Carbon Research Center; Tianjin, China

Millions of People Who Lack Adequate Electricity

Energy Access is a Human Right and a Rapidly Rising Need

12

3.5 Billion People Lack Proper Access to Electricity

140

210

34865988

436

Source: International Energy Agency World Energy Outlook 2012, The World Bank World Development Indicators 2012, CIA World Factbook 2012.

Millions of People Who Have No Electricity

589

29

134184961

Coal is Essential to Energy, Economic, Environmental Goals

● Ensure at least half of new generation from coal

● Replace older coal plants with ultra-supercritical plants

● Deploy coal-to-gas, coal-to-chemicals, coal-to-liquids

● Develop 100 CCS projects in a decade

● Commercialize near-zero emissions technology

13

Peabody Plan Advances Technology Solutions to Achieve 3Es

GreenGen Power Plant, Tianjin

21st Century Coal: Creating a Competitive Mongolian Coal Sector

14

21st Century Coal

15

● Introduced by the governments of China and the U.S. in 2009 to advance development of clean energy solutions

● Rests on a solid foundation of progress, advancement and innovation across our industry in recent decades in areas including safety, productivity, sustainability and near-zero emissions technology

● Provides the solution for economic progress and energy access for the nearly one in five people on the planet who have no access to electricity

Symbol for the Future of Coal in the World

16

21st Century Coal Approach: Peabody’s World-Class Surface Mines

● Every employee commits to mission, safety vision and sustainable practices

● Safe, efficient, large-scale mine operations start with best practices in training

● Well capitalized operations and state-of-the-art technology drive efficiency

● World-class environmental stewardship built into company’s mission

● Sustainable practices show respect for cultures

Creating Conditions for a Competitive, World-Class Coal Industry

17

● Role of the State ● Legal/policy framework ● Security of tenure ● Freedom to operate on a commercial basis ● Comprehensive environmental protection ● Competitive and stable fiscal terms

Six Building Blocks for Modern, World-Class Minerals Development

Source: The World Bank Group,

Developing Mongolia’s 21st Century Coal Industry: Recommendations

18

Social Compact: GoM, Investors,

Civil Society

Consolidate coal industry regulatory

functions into single oversight body

Mineral ownership 100% vested with Government until severed from land

Create Mongolian Citizens Social Fund

with independent oversight panel

Required training programs to maximize Mongolian workforce

over time

Establish independent

Mongolian Mining Tribunal

Pursue a phased approach for South Gobi

development

Safeguard highest value of mineral assets as global

tradable commodityAuthorize regional Environmental Impact

Assessments to provide consistency

February 20, 2014Arshad SayedPresident – Mongolia & India Peabody Energy

Global Coal Markets and Implications for Mongolia

COAL MONGOLIA