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Peabodq <br />Sage Creek Coal Company <br />29515 Routt County Road #27 <br />Oak Creek, CO. 80467 <br />April 12, 2010 <br />RE: Routt County Special Use Permit (SUP) Application for Underground Coal Mining <br />Dear Routt County Resident: <br />Sage Creek Coal Company (SCCC), a subsidiary of Peabody Energy, submitted a Special-Use Permit (SUP) <br />application package to Routt County on April 12, 2010 for development of a new underground coal mine. Peabody's <br />intent in developing the Peabody Sage Creek Mine (PSCM) is to replace coal production from Peabody's existing <br />Foidel Creek Mine (Twentymile Coal Company) as the existing reserves are depleted, in order to continue to supply <br />clean, high BTU, low sulfur and low ash coal to Northwest Colorado and other markets. <br />SCCC expects to begin portal and facilities development as early as July of 2010. In order to minimize new <br />disturbance, existing facilities from the previously-mined Seneca II Mine would also be utilized, where feasible. <br />Mine development and limited coal mining would begin the following year with a maximum annual production of <br />approximately 2 million tons. Initial development and mining will be limited to continuous miner development of <br />mine entries, with pillars of coal remaining for support and little or no potential for associated ground subsidence. If <br />the planned initial development indicates favorable mining conditions, and market conditions for future coal sales will <br />support full-scale mining operations, SCCC may proceed with required permitting and expansion of mining <br />operations to include full-scale longwall mining at production levels of up to 8.5 million tons per year. <br />In conjunction with the proposed initial development and mining operations, SCCC will submit a separate SUP for <br />coal hauling to both the existing Twentymile/Foidel Creek Mine facilities and to the Hayden Power Station in the <br />coming weeks. <br />Twentymile Coal Company, a subsidiary of Peabody Energy, is currently the largest employer in Routt County and <br />Northwest Colorado. In addition to stable, high-paying jobs, the company provides significant benefits to the local, <br />State, and national economies, through purchases of goods and services, and payment of taxes and royalties. By <br />maintaining and continuing coal production operations in Routt County and Northwest Colorado, SCCC will continue <br />Peabody Energy's commitment to supply clean, high BTU, low sulfur and low ash coal for power generation, and will <br />continue to support and benefit our economy. <br />Sincerely, <br />B. Scott Cowman <br />Senior Environmental Specialist <br />cc: Mike Ludlow (SCCC) <br />Jerry Nettleton (TCC)