US-based Peabody Energy is set to begin longwall mining this week at its Centurion mine in Australia’s Bowen basin, two months ahead of schedule.

Centurion is Peabody’s flagship Tier 1 premium hard coking coal operation and is expected to become a cornerstone asset in the group’s portfolio following years of development and investment.

“With a low-cost structure, premium price realisations and a long mine life, Centurion immediately vaults to the top of Peabody’s coal operations and establishes a multi-decade foundation for shareholder value creation,” president and CEO Jim Grech said on Thursday, announcing the group's financial results.

“Full operations at Centurion follow years of strategic investment, and investors will now begin to benefit from this premier addition to the portfolio,” he added.

The mine is expected to deliver average production of about 4.7-million tonnes a year at estimated costs of $105/t in 2024 dollars over a mine life exceeding 25 years. It is underpinned by an expanded integrated mine plan of 140-million tonnes in the Goonyella Middle Seam.

Production is targeted at 3.5-million tonnes in 2026, with output ramping up to the full 4.7-million-tonne annual run rate by 2028.

Peabody said Centurion’s high product quality and proximity to major Asian steelmaking markets positioned the operation to achieve full benchmark premium hard coking coal pricing.

As a result, the company expects its segment-wide metallurgical coal realisations to improve from about 70% of benchmark pricing in 2025 to around 80% in 2026, with potential for further gains as Centurion reaches steady-state production.

The company has increased its estimate of Centurion’s net present value to $2.1-billion at a benchmark coal price of $225/t, representing an increase of more than 30% compared with late-2024 estimates.

In parallel with its metallurgical coal expansion, Peabody continues to advance rare-earth element (REE) and critical minerals initiatives, primarily focused on its Powder River basin operations in the US.

Testing indicates that selective mining feedstocks contain commercially attractive concentrations of both light and heavy REEs, including yttrium, dysprosium and terbium, as well as critical minerals such as germanium, gallium and scandium.

Analysis of targeted feedstocks has identified critical mineral oxide concentrations ranging from 428 parts per million (ppm) to 1 669 ppm on a dry-ash basis, with heavy rare earths accounting for an estimated 21% to 28% of total concentrations.

The company has been recommended for $6.25-million in funding from the Wyoming Energy Authority to support a pilot processing plant and is working with technology partners to develop flowsheets and conduct techno-economic assessments.

While the initiative remained at an early stage, Peabody said progress to date had encouraged it to expand its evaluation of commercial potential.

Looking ahead to 2026, Grech said the company would focus on ramping up Centurion production, strengthening its metallurgical coal platform and improving cash generation.

“As we begin 2026, Peabody continues to advance our transition to greater metallurgical coal production while building on our leadership position in US energy coal,” he said.

“Our investment thesis is supported by a strengthened portfolio, disciplined capital allocation framework, and increasing opportunities across both steelmaking coal and US energy markets.”