Peabody Energy's Q2 2025: Unraveling Contradictions on MAC, Centurion Timing, and Cost Management

Moranbah North Material Adverse Change (MAC), Anglo American dispute and MAC negotiations, Centurion project timing and production, cost management expectations, and production and cost expectations at Shoal Creek are the key contradictions discussed in Peabody Energy's latest 2025Q2 earnings call



Strong Safety and Operational Performance:
- Peabody reported record safety performance in the first half of 2025, on track to beat last year's best performance.
- The company achieved solid volumes and robust cost containment, with second-quarter costs coming in below expectations.
- This success was attributed to the Peabody team's excellent management of controllable factors and improved operational execution.

U.S. Market and Regulatory Tailwinds:
- Coal fuel generation in the U.S. increased by 15% in the first half of 2025 compared to 2024.
- The passage of the One Big Beautiful Bill led to substantial savings for Peabody, with anticipated net benefits of $15 million to $20 million in the second half of 2025.
- The bill reduced federal royalty rates and provided tax credits, improving Peabody's competitiveness and enhancing U.S. coal industry prospects.

Seaborne Market Dynamics and Cost Management:
- Peabody lowered its full-year seaborne thermal cost guidance by $3 per ton at the midpoint.
- The company managed to raise full-year seaborne thermal volumes by 200,000 tons.
- Cost improvements were driven by effective cost management, including offsetting impacts from port congestion and Wambo mine closure, resulting in better-than-expected results.

Centurion Project Progress:
- Peabody accelerated longwall operations at its Centurion mine, with a targeted start-up in February 2026, six months ahead of schedule.
- The company plans to install longwall shields in November and aims to reach a headcount of around 400 employees by early 2026.
- The progress reflects strong execution across operations and a focus on expanding the workforce to support full production.