Press Releases

Peabody Energy announced today that it has signed memoranda of understanding with RAG Coal International AG to purchase coal assets in Colorado and a 25 percent interest in a coal operation in Venezuela. The purchase would include:

   --   The Twentymile Mine near Steamboat Springs, Colo.  The highly
        productive longwall mine produces approximately 7.5 million tons per
        year of low-sulfur coal for electricity generators in the West,
        Southwest, Midwest and Mexico; and
   --   A 25 percent interest in Carbones del Guasare, S.A., a joint venture
        involving RAG, Anglo American plc and Carbozulia, a unit of the
        Venezuelan oil company PDVSA.  Carbones del Guasare operates the
        Paso Diablo surface mine in northwestern Venezuela, which produces
        nearly 7 million metric tonnes per year of coal for electricity
        generation and steel production in Europe and North America.

The transaction is subject to a number of conditions and the negotiation of definitive agreements. It is expected to be completed in the first half of 2004.

Peabody Energy is the world's largest private-sector coal company, with 2002 sales of 198 million tons of coal and $2.7 billion in revenues. Its coal products fuel more than 9 percent of all U.S. electricity generation and more than 2 percent of worldwide electricity generation.

   CONTACT:
   Vic Svec
   (314) 342-7768

SOURCE: Peabody Energy