Galax, Virginia (Platts)--25Feb2011/547 pm EST/2247 GMT

Peabody Energy said Friday it has entered into an agreement with Indonesia's PT Cahaya Energi Mandiri to source 2 million st of coal for export to Asian thermal coal customers through Peabody Coaltrade's international trading hub in Singapore.

"The contract marks the third term agreement Peabody has secured in recent months, which together account for 5.5 million tons of Indonesian coal," Peabody said in a statement. "Coal from PT CEM will be secured over two years from a mine in East Kalimantan, and the relationship could be expanded over time."

"We will continue to increase our coal sourcing in Indonesia, the world's largest supplier of seaborne thermal coal," Peabody's president and chief commercial officer, Richard A. Navarre, said in the statement.

Peabody did not identify any customers for the coal shipments. A company spokeswoman declined to give further details Friday.

Seaborne coal demand is projected to exceed 1 billion mt in 2011, with the Asia Pacific region comprising the vast majority of demand growth, Peabody said.

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