Firm to build combination of power plant, coal mine

Peabody Energy Corp. will build a $2 billion combination coal mine and power plant in Washington County, creating 1,500 construction jobs and up to 500 permanent jobs in an area hit hard by the decline of the state's coal industry, Sen. Dave Luechtefeld said Friday.

The 1,500-megawatt "mine-mouth" plant will burn 6 million tons of Illinois coal annually, said Luechtefeld, R-Okawville. Construction could start within one year, he said.

Peabody spokesman Vic Svec declined to comment on the company's plans but said Peabody officials will make an announcement Monday in Nashville on the town's courthouse steps.

"It's a very big project," Luechtefeld said. "It's very good news."

The project would be the first major one in the state since lawmakers passed a package of grants, tax breaks and other incentives in June aimed at boosting the state's coal industry, which was battered in the 1990s when the Clean Air Act made local coal too expensive to burn cleanly.

Peabody in 1999 closed its Marissa mine in southeastern St. Clair County, near the site of the planned mine, leaving 400 workers without jobs.

The Baldwin power plant nearby, which the Marissa mine fed, had switched to Western coal from Illinois' high-sulfur variety.

Hard-hit area

The area is one of those hardest hit along Illinois' considerable coal seam, said Taylor Pensoneau, president of the Illinois Coal Association.

Local union representatives said they had heard rumors of Peabody's plans, but had not been notified by the company.

The union will try to organize workers once they're hired, said Joseph Angleton, president of District 12 of the United Mine Workers of America.

"Since we've not been invited to the table, we'll have to invite ourselves," he said.

Mine-mouth power plants consist of power generators located near the coal mines that feed them. Such plants are cost effective because the coal that fires them does not have to be transported far.

St. Louis-based Peabody, the largest coal producer in the world, will start a power subsidiary of its own instead of partnering with a separate company to run the generator, Luechtefeld said.

Peabody owns 2.2 billion tons of coal reserves in Southern Illinois and in 2000 mined 182 million tons of coal nationwide.

The company owns 82 percent of the Evansville, Ind.-based Black Beauty Coal Co., which operates the Sugar Camp Mine near Harrisburg and the Riola Mine No. 1 near Danville, both of which are expanding their operations, Svec said.