Good day, and welcome to the Peabody Third Quarter Earnings Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. And at this time, I would like to turn the call over to Ms. Alice Tharenos, Vice President of Investor Relations. Please go ahead, ma'am.

Good morning, and thanks for joining Peabody's earnings call for the third quarter of 2022. With me today are President and CEO, Jim Grech, and CFO, Mark Spurbeck. Within the earnings release, you'll find our statement on forward-looking information as well as a reconciliation of non-GAAP financial measures. We encourage you to consider the risk factors referenced there, along with our public filings with the SEC. I'll now turn the call over to Jim.

Thanks, Alice, and good morning, everyone. In the third quarter, our diversified assets delivered strong performance results, generating free cash flow of over $460 million and adjusted EBITDA of $439 million, while recovering from significant weather events in Australia in the early part of the third quarter. We have set the stage to finish the year even stronger, with higher projected volume compared to prior quarters and markets supporting continued strong margins. With the cash generated, we continue to strengthen our balance sheet by advancing our debt reduction strategy with voluntary repurchases, bringing us closer to eliminating all senior secured debt, which will allow us greater financial flexibility in the future. And I am pleased to share that we have commenced the redevelopment efforts at North Goonyella. Before I expand on the quarter and the range of some of our Australian operations, I would like to sincerely thank our global employees for continuing to work safely and efficiently and keeping us focused in the face of adverse events and distractions. The dedication and commitment of our talented workforce allows us to deliver strong results. I would also like to congratulate the teams at both Twentymile and Shoal Creek for winning the 2021 Sentinels of Safety Award for their outstanding safety performance, the United States most prestigious award recognizing mining safety. I'm extremely proud of this accomplishment and the commitment to safety that this exemplifies. Now, turning to global coal markets. Across the globe, all coal price indices remain at strong levels. The outlook for all our operating segments continues to be favorable with the constrained supply base serving a market that is reallocating the scarce availability of coal. Seaborne coal markets remain volatile, with near-term markets being driven by continued energy supply security issues caused by the Russia-Ukraine conflict, the global inflationary environment, concerns with the severity of the impending winter in Europe, and the wet season in Australia and Indonesia. Seaborne thermal coal prices remain elevated, as around the globe, coal fuel generation is called upon for affordable, reliable energy security. The Russia-Ukraine conflict continues to impact markets, and the cessation of coal imports from Russia by European countries is creating the need to source from alternative locations, including Australia and the US. Furthermore, an underwater pipeline explosion is reducing Russian gas pipeline flows into Europe and is putting additional reliance on imported coal to meet the upcoming European winter demand. Overall, global thermal coal markets remained strong, with pricing well supported due to market tightness. Within the seaborne metallurgical market, steel output remains depressed, impacted by both seasonal and macroeconomic considerations. However, offsetting this are steelmakers in Atlantic markets, switching away from Russian coal imports and seeking supply from other regions such as Australia, the US, and Canada, particularly for PCI coals. While energy shortages and inflationary concerns in some markets present a risk to near-term industrial activity, the underlying market fundamentals remain constructive, as metallurgical coal supply has declined and any additional production disruptions from wet weather and coal operation outages will lead to further tightening of the market. In the United States, the coal market continues to be very tight, as strong demand for electricity generation competes with persisting transportation issues, impacting supply to utilities. Overall, electricity demand increased more than 3% year-over-year, positively impacted by weather and economic activity. However, year-to-date electricity generation from thermal coal has declined year-over-year, due to coal conservation by utilities to build coal stockpiles, given concerns with rail performance. US natural gas prices remain elevated, although lower than record highs earlier this year. Numerous factors will impact coal utilization heading into winter, including the resolution of transportation issues, weather, renewable generation, and natural gas prices. Across the US, we continue to see growing caution regarding the pace of energy transition and the value of dispatchable capacity. Evidence of this are announcements of coal plant retirements being delayed, with most utilities citing grid reliability concerns or delayed renewable projects. This speaks to continued strong coal demand for US coals. Overall, we anticipate continued near-term market volatility as coal demand fluctuates and supply remains constrained across the globe. Our diversified platform is positioned to participate in each of these markets, optimizing results by managing the needs of our diversified customer base. Now, turning to the third quarter. Our third quarter results were strong despite recovering from significant weather and logistical challenges experienced in the first half of the year and early part of the third quarter. During the quarter, we set the stage to finish the year even stronger, with higher volume projected for delivery in the fourth quarter. Wet weather continues to be a theme impacting production at our Australian operations, with the current rain resulting in decreases in fourth quarter estimated production at some of our operations. In our seaborne thermal segment, the impact of additional heavy rain in early July and absenteeism associated with COVID impacts and industry-wide staffing pressures resulted in lower third quarter production volumes and increased costs as compared to prior quarters. Year-to-date, Wambo and Wilpinjong have received more than 190% and 155%, respectively, of the 10-year historical rain averages. Last week, as a result of major rain, we had a temporary stoppage in production at Wilpinjong. The continuing rainy weather conditions in New South Wales pose a risk to these operations, even with increased water management capabilities put in place. Based on weather events in the early part of the quarter, we have reduced our thermal export sales expectation by over 500,000 tonnes for the fourth quarter. Our Seaborne Met segment delivered higher volumes this quarter and is set to deliver even higher volume next quarter. Metropolitan produced higher volume following the completion of a longwall move in the first half of the year. This higher volume offset lower sales volume at Shoal Creek from continued production challenges due to geologic conditions and the impacts of a barge and loader issue at the port, impacting the timing of September vessels. We anticipate these issues will continue throughout the year with full year 2022 sales expectations at Shoal Creek reduced to 900,000 tons. Wet weather earlier in October has impacted CMJV production expectations for the quarter, resulting in anticipated sales being reduced by about 150,000 tons. Outside of our operating segments, our 50% ownership share of the Middlemount JV delivered 400,000 attributable tons in the third quarter, with production continuing to be impacted by the severe rain earlier in the year. This operation has also suffered from additional rain quarter-to-date and is anticipated to have lower sales, and lower results in the fourth quarter as compared to the third quarter. In the PRB, higher customer nominations and improving rail performance resulted in an increase of nearly 4 million tonnes shipped as compared to the prior quarter. The higher volume favorably impacted our per-ton costs. We are cautiously optimistic for improving rail performance going into the fourth quarter. Our other US thermal mines continue to achieve consistent strong results with the increased volume delivered in the third quarter despite experiencing some rail performance issues, primarily at the El Segundo Mine in New Mexico. Going into the fourth quarter, we are expecting to finish the year strong with higher cash flow generation projected as compared to prior quarters. We remain focused on strengthening the balance sheet with further substantial senior secured debt retirement and pre-funding of our long-term reclamation obligations. After considerable evaluation, I am pleased to share that we are moving forward with initial steps for the market value of the company's North Goonyella mine, a premium hard coking coal longwall operation in Australia with 70 million tons of company-controlled reserves. The project is a unique opportunity in that it will benefit from substantial existing infrastructure and equipment in place at the mine, including a new 300-meter longwall system, a proven coal handling preparation plant, dedicated rail lot for transport to the Dalrymple Bay Coal Terminal, and an accommodation village with housing and service amenities for more than 400 workers. This infrastructure makes this opportunity superior to other green and brownfield projects that do not have significant infrastructure in place. North Goonyella is expected to generate attractive returns at historical long-term price assumptions while reweighting Peabody's long-term production and revenue towards metallurgical coal in line with our strategy. Initial redevelopment capital expenditures of $140 million over the next 18 months have been approved. Development costs beyond the current Board approved amounts are estimated to be an additional $240 million, bringing total estimated capital to approximately $380 million over three years, with longwall operations expected to commence in 2026. Beyond this project, North Goonyella has additional strategic value with 50 million tons of remaining company-controlled reserves in addition to multiple other regional options for further extensions. Options for further development on our existing and regional reserves continue to be assessed in light of the adverse impact of the changes to the Queensland government's royalty regime. As we take the first steps toward redevelopment at North Goonyella, we continue to urge the Queensland government to roll back their extreme royalty structure, which will not only discourage investment in Queensland but also risks tens of thousands of jobs and local business opportunities that coal mines deliver to regional communities. Finally, as you may have seen, Coronado Global Resources recently issued an announcement confirming that we are engaged in discussions about a potential combination. It is important to note that while there can be no assurance of any such transaction, we do regularly evaluate a range of strategic options to strengthen our position as a coal producer of choice for both thermal and metallurgical coal, and any actions we take will always be consistent with our focus and commitment to creating value for shareholders. At this time, we do not have any updates to share, and we will not be commenting further on that matter today. I'll now turn things over to Mark to cover the financial details.

Thanks, Jim, and good morning, everyone. In the third quarter, we recorded net income attributable to common shareholders of $375 million or $2.33 per diluted share and adjusted EBITDA of $439 million. Year-to-date, adjusted EBITDA was $1.3 billion, nearly three times the prior year results. For the quarter, we reported free cash flow of $461 million, the best result in 18 quarters and had approximately $1.4 billion of cash and cash equivalents at September 30. Our unique best-in-class diversified portfolio continues to set Peabody apart. Our Seaborne Thermal segment led the way with premium Australian thermal coal priced on average above $420 per metric ton, substantially higher than the premium hard coking coal average price of about $250. Together with higher demand in the US, each of our operating segments reported higher per ton margins compared to the second quarter, except seaborne metallurgical coal, which despite achieving $30 per ton in lower cost, realized lower market pricing. Turning now to the third quarter segment results. Seaborne Thermal generated $171 million of adjusted EBITDA and benefited from higher realized prices, resulting in a 48% adjusted EBITDA margin. The segment exported 1.6 million tons at an average realized price of $188, approximately $45 higher than the second quarter. Costs were $5 per ton higher, impacted by both lower weather-related production at the Wambo Open-Cut joint venture and higher sales price-sensitive costs. Included in the Seaborne Thermal segment is the Wilpinjong Mine, which shipped 2.8 million tons, including over 700,000 export tons. Wilpinjong realized an average sales price of $72 per ton, about 15% lower than the prior quarter due to fewer tons available for export. Wilpinjong recorded $115 million of adjusted EBITDA for the quarter, repaid $136 million of its debt, and had over $200 million of cash at September 30. Seaborne Met generated $113 million of adjusted EBITDA as lower average realized prices of $180 per ton were partially offset by higher production and lower costs compared to the second quarter, resulting in a 36% adjusted EBITDA margin. The segment sold 1.8 million tons, about 13% more than the prior quarter. Costs were $30 per ton lower due to higher production at Metropolitan and lower sales price-sensitive costs. The US thermal mines delivered $111 million of adjusted EBITDA, our best quarter year-to-date. The investments we made early in the year continue to allow for higher production levels and the PRB began to benefit from some of the uncovered coal in the first half of the year. The PRB shipped 22.3 million tons, about 4 million more than the second quarter, despite rail service meeting only 83% of customer nominations. Cost per ton were $1.26 lower quarter-over-quarter due to higher production, resulting in a 13% adjusted EBITDA margin. The other US thermal mines shipped 4.8 million tons, 400,000 tons higher than the second quarter. Better realized pricing offset higher labor and repair costs, resulting in higher margins per ton and a 28% adjusted EBITDA margin. Now, a look at the balance sheet. At September 30, we had $1.4 billion of cash and cash equivalents, $485 million more than total debt. During the quarter, we retired an additional $186 million of secured debt and have $143 million of additional repurchase offers on the Wilpinjong 10% debt currently outstanding. At September 30, we classified all remaining secured debt as a current liability on the balance sheet, underscoring our intent and ability to retire all debt other than the 2028 convertible notes in the next 12 months. During the third quarter, we posted an additional $31 million of cash collateral toward future reclamation obligations, bringing total cash collateral supporting surety bonds to $88 million. Based on third quarter free cash flow results, an additional $62 million will be posted in the fourth quarter. At September 30, we had $466 million of cash margins supporting the Wambo Underground mine hedge program, $78 million less than the June 30 balance. We have approximately 900,000 metric tons still exposed to margin variations, all of which will roll off over the next three quarters. Now, let's turn to our outlook for the remainder of the year. As Jim mentioned, we updated fourth quarter guidance to account for the expected impacts to our Australian mines from the recent rain. Despite these adjustments, we expect the seaborne thermal and metallurgical segments to report their highest quarterly sales volumes of the year in the fourth quarter. The seaborne thermal segment is expected to ship 2.4 million tons, with 1.2 million export tons priced on average at $122, including 564,000 metric tons hedged at $84. There are also 1.2 million unpriced tons with 100,000 tons expected to price at Newcastle benchmark levels and 1.1 million tons expected to price in line with API 5 coal due to current coal quality and market conditions. Costs are expected to improve to $40 per tonne due to higher production quarter-over-quarter. Seaborne Metallurgical volume is expected to be approximately 2 million tons, with 200,000 tons priced at $244 and the unpriced tons expected to achieve 75% to 80% of the premium hard coking coal benchmark price. Based on production mix, costs are expected to be $125 per ton. In the PRB, we expect to ship 23 million tons at an average price of $13.50. Costs are expected to be $11.50 per tonne, resulting in our best quarterly margin of the year at $2 per ton. Other US thermal volume is now expected to be 4.7 million tons, with costs at $40. Lower segment expectations are primarily due to poor rail service at our El Segundo mine. Despite these adjustments, volumes and costs are expected to be largely in line with third quarter results. Looking out to 2023 on US thermal volumes, we have 82 million PRB tons priced at $13.25, with some higher-quality 8,800 Btu coal uncommitted and 18.6 million other US general tons priced at $50.70 per ton. We expect to finish the year with an improved balance sheet and significantly less debt, $150 million of cash funding for future reclamation, enhanced financial flexibility, and the redevelopment of North Goonyella underway.

Thank you. We will now begin the question-and-answer session. And the first question will come from Nathan Martin with Benchmark. Please go ahead.

Thanks, operator. Good morning, everyone. Congratulations on the quarter, and I appreciate the opportunity to ask my questions. Let's begin with the North Goonyella redevelopment, which is clearly a high-quality met coal project. We've confirmed discussions with Coronado, a notable net levered producer. I would love to hear your insights on the met markets as they appear to be receiving more attention lately. Thank you.

Nate, the metallurgical seaborne markets, as we've said in the past, have been a focus area for growth for us, particularly in the Asian markets, which we serve. And they continue to be a focus for us and areas that we would look to strategically grow into the future. The North Goonyella project is a part of fulfilling that strategy and our outlook on these markets. And we're very, very bullish on that project because we think it's a unique metallurgical coal product versus any other opportunity like that in the world. And that is because of two reasons. One, it's high-quality metallurgical coal. And two, because we have such substantial infrastructure in place already with the rail route, the longwall, and the accommodation village. There's a significant amount of investment already just sitting there. And to put the incremental investment that we need to, to bring that mine back into service is just an outstanding opportunity that we've obviously taken steps to embark upon. So again, it fits right in with our view that the seaborne met markets are a potential growth area for us in the future.

Appreciate those comments, Jim. Maybe kind of looking ahead, first, you guys raised CapEx, obviously, around looks like $20 million for this year, $210 million, again, driven by the North Goonyella project. Any early thoughts on what CapEx could look like in 2023? I think maintenance this year was about $110 million. Is that still kind of a fair number to use? And what do you expect spending to look like in 2023 on North Goonyella as you move forward? Thanks.

Nate, it's Mark. We're not providing any guidance for 2023 yet, specific to North Goonyella, though we announced the essentially $136 million that's going to be spent over the next six quarters, really through the end of the first quarter of 2024. So that's kind of the spend for North Goonyella for that first chunk. We also noted that there's about $230 million or $240 million of additional development at North Goonyella, above what we've announced and approved, that would be spent over the following two years after that first $136 million. So you're really looking at about $370 million total for North Goonyella now, really over the next 3.5 years, pretty proportionately or on a straight line.

Thank you for the information, Mark. Regarding the quarter, I noticed that the other operating cost line item was higher than I had anticipated. I understand this can be somewhat inconsistent, as it's largely influenced by trading and brokerage activities, as you've mentioned before. Could you provide some insights on this? More importantly, how do you foresee this line item evolving in the fourth quarter and future periods? Thank you.

Yeah. Thanks for that question. Two things, that's mostly that other. We do run through the former North Goonyella holding cost event running through there, but that is primarily the trading activities that you mentioned. We typically use that to maximize our blending opportunities and generally make a modest yet meaningful profit for the company. Particularly this quarter, though, it's a good question because, as a reminder, we realized some hedge losses in the first quarter of this year due to weather-related production delays, deferred shipment of about 180,000 hedge tons at spot prices, when we delivered into other fixed price contracts that we had delivered at fixed prices. That loss was reported through coal trade in the first quarter and was a result simply from the timing difference of delivering that physical coal and the hedge contracts. Now if you recall, first quarter average prices were about $264 per metric ton, now here in the third quarter, we delivered some of those tons when the average price was $420 a metric ton. So we realized about $27 million in coal trading profits during the quarter just from that timing difference. But those truly are real earnings based on selling that coal at $420 million versus $264.

And any thoughts, Mark, on how that might look like going forward or how to model that?

There are still about 900,000 tons in that program that are coming off. I would estimate that we have recovered around half of those deferred tons from the first quarter. So, at current prices, I anticipate a similar coal trading profit for the fourth quarter in that range.

Got it. That's very helpful. Appreciate that. And then, I guess just maybe one final item, if I could. We've seen, obviously, the heavy rains you guys spoke about in your prepared remarks in October; sounds like you've kind of incorporated it in your guidance as best as possible. What else are you guys doing to kind of deal with those heavy rains? And how comfortable are you with the 2.4 million tons of fourth quarter exports you're guiding to at this point? Thanks.

Yeah, Nathan. Like I said, we've incorporated our best estimates into the forecast for the impacts of those rains, and we even have in our forecast some allowance for other rain events. So we feel good about the forecast we have out there, pending anything that I would call extensive or out of the ordinary occurring; we do have some allowances for that already in the numbers. What we've been doing is on our site, each site is distinctly different ways to manage the water with the much larger volumes if they are to reoccur and treating the water. So eventually, we can remove it from site. So each of the different sites have put in plans to handle these large amounts of water that we already have on-site currently, and that may be coming again in the future. So again, we're taking the steps that we can take to be ready for these types of events occurring again.

Thank you, Jim. I'll pass it on. Appreciate the time. And best of luck during the fourth quarter.

Yeah. Thank you, Nathan.

The next question will come from Lucas Pipes with B. Riley Securities. Please go ahead.

Thank you. Thank you very much, operator. Good morning, everyone, and good job in the quarter.

Good morning, Lucas. Thank you.

I do want to follow up on the North Goonyella decision. And specifically, you know that the market puts a very significant premium on capital returns. So how do you think about pursuing this organic growth project while also meeting market expectations for ongoing capital returns, especially as we look out to 2023? Thank you very much for your perspective.

Thanks, Lucas. It's Mark. I'll take a crack at that. We've talked here for a few quarters now about our strategy — first, deleveraging the balance sheet. As you know, shareholder returns are restricted with our secured debt as well as our surety agreement. Since the start of '21, we repaid about $700 million of debt. And at the same time, we've increased our cash balance from about $700 million to $1.4 billion. With the classification of all our secured debt as current liabilities on the balance sheet, it's a clear signal that we will eliminate that remaining $550 million over the next 12 months. Specifically, Wilken Yang has about $195 million of debt outstanding. We have offers, as I mentioned in my remarks, outstanding to repurchase that debt. To date, we have received tenders into those offers for substantially all of that debt. So I expect that to be cleared up in short order. We're also addressing the unfunded $300 million LC facility that costs about $20 million a year to maintain that matures in 2024 and will not be renewed. Currently, that facility is providing noncash collateral for future reclamation liabilities. As you may recall, our surety agreement also requires some additional collateral based on free cash flow. And as noted, $62 million of collateral has been posted here in the fourth quarter, bringing our total prepaid reclamation fund to 150 million. So the last part is the surety agreement. So let me just add here that we continue to have really good discussions with our surety partners. We've discovered a lot of common ground. We're certainly aligned on the company's continued deleveraging efforts, and we are seeking a final reclamation surety agreement to cash collateralized that can reasonably level relative to the actual liability and then remove those restrictions from shareholder returns as well. We expect to continue to finalize that here in the coming months. So, with those shackles removed, we have an opportunity to do a couple of things. We regain that financial flexibility, we can reinvest in organic projects like North Goonyella. Jim mentioned a world-class premium hard coking coal that can deliver 3 million to 4 million tonnes a year of that coal for an investment of $370 million over the next few years. That's a 25% return, and that's only utilizing 28% of the existing reserves in that project. So while we have great organic portfolio opportunities, we're also looking to do that side-by-side with shareholder returns and elimination of this debt.

Mark, really appreciate that comprehensive answer. That is very helpful. One of the pieces in all of this is also M&A. When you think about capital returns in North Goonyella and then also M&A, how do those pieces fit together? Thank you very much for your perspective.

Lucas, as Mark said, given the strong cash generation projects, after we look at strengthening our balance sheet, and as Mark said, removing those shackles, we then can look at different things that aren't mutually exclusive, whether it's shareholder returns, organic growth, or M&A. So participating in one doesn't necessarily preclude participating in the other. What we do have a focus on now is what is the best overall decision for our shareholders, and that overrides anything that we're doing as far as what we're going to be doing with the capital once we have these shackles and this financial flexibility to do some more maneuvering with the cash in the company.

Helpful. And given that you've signaled the go-ahead here in North Goonyella, is it fair to conclude that that is clearly better than what you're seeing available on the M&A front?

Again, I'm not going to comment on any M&A activities. As I said, with the shareholder returns, organic growth, or M&A, they don't have to be mutually exclusive. The North Goonyella project stands alone on its own merits. Again, with the returns that Mark mentioned, and I would say the lower execution risk of a project like that versus something that's greenfield, because there's so much infrastructure in place, we know the reserves. We look at it as a very low-risk organic growth opportunity, the stand-alone is a very, very good decision for our company.

Thank you. I have one final question regarding the capital structure allocation. I may return with operational questions later. Mark, I appreciate your earlier response; it was very helpful. You mentioned plans to pay off all the secured debt within the next 12 months and that you are in discussions with the sureties. Can you provide more details on when those secured debt payments might occur? Do you anticipate that happening in the first quarter of 2023, and will the discussions with the sureties conclude around the same time? Thank you for your insights.

Yes. I appreciate those questions, Lucas. Certainly, from a secured debt perspective, I mentioned the Wilpinjong debt, $195 million. So the big piece of that, we have offers outstanding. Substantially all of that's been tendered. So that should be cleaned up hopefully in the next quarter — in the fourth quarter here. The other secured debt, the term loan that can be repaid without penalty and premium at a time of our choosing, and the 2025 notes are currently callable as well at a very small premium to part. So, we can take that out, and we expect to do so in the next 12 months. As far as the sureties go, my partners, like I mentioned, we're having really productive conversations. We have a lot of common ground. So, I think the timeline is the same. I'd expect to have that wrapped up here by the end of the first quarter of next year.

Very helpful. Again, I appreciate all the color and keep up the good work. Thank you.

Thanks, Lucas.

The next question will come from David Gagliano with BMO Capital Markets. Please go ahead.

Hi. Thank you for taking my questions. I believe many of my queries have already been answered. However, I would like to clarify a bit about North Goonyella, specifically regarding the timing. You mentioned that capital expenditures will reach $140 million by the first quarter of 2024, totaling $370 million. Could you provide an update on the expected timeline for the ramp-up of production? Additionally, what is your initial assessment of a reasonable range for cash costs?

On the production, we will start seeing development coal coming in 2024, Dave. That's the plan for that and then, longwall coal coming sometime in the first half of 2026. So that's the timing of when we see the production flowing. I'm sorry, what was the other question you had?

I mean I know it's early days, and I know we've been in and out of North Goonyella over the years. My other question was a reasonable range for cash costs in 2026 as best you can tell in 2022?

You're talking North Goonyella cash costs.

Right.

I think we're probably looking at $95 to $100 a ton.

All right. Perfect. And then on the M&A commentary and the commentary that North Goonyella M&A are not mutually exclusive. When you look at M&A, are you considering — what's the more likely type of opportunities you're looking at? Is it full corporate activity or acquisitions, or is it asset by asset, or if you could just give us a sense as to what types of things are under consideration?

Dave, our strategy for growth, whether it's organic or M&A, if it were to occur, is to go to the seaborne markets with the markets being preferred over the thermal markets. But again, not to say we wouldn't look at it, but a high preference is to expand in the seaborne metallurgical markets is the direction we'd like to go in the future. And we would look at any type of opportunity that would make sense to us. So, I would put any limits on what we would look at as far as the type of opportunity.

Okay. And then just along the same lines, in terms of incremental investments elsewhere geographically, can you comment a little bit about thoughts about the US thermal strategic plans? It wasn't too long ago, Peabody and Arch were trying to get together out there. Obviously, you didn't work out from an antitrust perspective. Obviously, things have changed a lot. And I'm just curious what the current thinking is with regard to future meaningful investments in the US Powder River Basin, for example, or just in the US normal business in general?

In regards to the M&A question, I think if that's what you're asking, again, our focus is the seaborne metallurgical growth. So in the domestic US thermal, we like the assets that we have. They're low-cost assets both in the PRB and in the Midwest. And earlier in the year, we've announced some investments in equipment for those mines. And we've also — in the first half of the year, we invested in uncovering some more coal in the PRB to be ready to meet some demand here. So our investments in our US assets, Dave, are to, I'd call it, small incremental growth off of our existing asset base, nothing significant or as far as capital investments there. It's basically taking what we have, putting some more of the equipment back into service, hiring people to man the equipment, and then that can fluctuate with demand, that would be how we're looking at our US assets — US thermal assets.

Understood. Okay. And then just the last one for me on the same topic, when you assess your existing portfolio, do you see divestment opportunities within that portfolio?

I don't like to comment on M&A or divestments. Again, whatever makes more sense for our shareholders, we're always open to looking at it and we'll look for that opportunity.

Okay. Great. Thanks very much for taking my question.

Yes. Thank you, Dave.

As there are no further questions, I would like to turn the conference back over to Mr. Jim Grech for any closing remarks. Please go ahead.

Well, thank you all for joining us today. I'd especially like to thank our employees for remaining focused on safety and for continuing to execute on all our various initiatives. I'd also like to thank our customers, investors, insurance providers, and vendors for your continued support. Operator, that concludes our call.

This concludes today's teleconference. We do appreciate your participation. You may now disconnect.