It also has many well-established, strategic relationships with its key suppliers of goods and does not believe that it is overly dependent on any of its individual suppliers.

“In the past, there has been consolidation in the supplier base providing certain mining materials and equipment to the coal industry,” Peabody said in its filing.

“This has limited the number of global sources for these items, such as surface and underground mining equipment.

“In situations where we have elected to concentrate a large portion of our purchases with one supplier in lieu of seeking other alternatives, it has been to take advantage of cost savings from larger volumes of purchases, benefit from long-term pricing for parts, ensure security of supply and allow for equipment fleet standardisation.”

The principal goods it purchases in support of its mining activities are mining equipment and replacement parts, diesel fuel, ammonium-nitrate and emulsion-based explosives, off-the-road tyres, steel-related products including roof control materials, lubricants and electricity.

It said supplier concentration related to its mining equipment also allowed Peabody to benefit from fleet standardisation, which in turn improved asset utilisation by aiding the development of common maintenance practices across its global platform and enhanced its flexibility to move equipment between mines as necessary.

“Surface and underground mining equipment demand and lead times have remained suppressed in recent periods due to challenged market conditions experienced across several extractive industry sectors,” according to Peabody.

“This is consistent with a decline in our own near-term demand for such equipment as we extend the lives of existing equipment through improved maintenance practices and equipment rebuilds in order to defer the requirement for larger capital purchases.

 

“We continue to use our global leverage with major suppliers to ensure security of supply to meet the requirements of our active mines.”