Investing in Prosperity

By supporting our communities today, we’re building a better tomorrow. Education represents the largest area of giving for Arch Coal. Our education-related giving allows us to support our future workforce while giving back to nearby communities.

Arch’s signature community program, the Arch Coal Teacher Achievement Awards, honors 27 outstanding teachers annually in West Virginia, Wyoming and parts of Utah. Teachers say that our application requires comprehensive self-reflection about teaching philosophies, which helps them excel even more. In fact, several have gone on to earn state Teacher of the Year awards. We have awarded more than $1 million to 374 recipients since the program began more than 20 years ago. In West Virginia, our Teacher Achievement Awards is the longest-running, privately sponsored teacher recognition program.

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Enthusiasm for Education

Our enthusiasm for education initiatives extends to our corporate giving efforts. In 2009 and 2010, education made up more than $2.8 million of our more than $5 million in community giving.

Colorado: Our Innovative Teaching Grants program encourages new and creative teaching methods in Delta County schools. One 2010 in-class project resulted in the student-led design and construction of an award-winning traveling device that helps travelers with physical disabilities tow a bag through an airport. To inspire future teacher collaboration, Arch Coal compiles some of the best ideas into an online and shareable learning tool.

Wyoming: Arch is helping to fund the Energy Resources Center at the University of Wyoming. Thanks in part to a $1.5 million pledge by Arch in 2009, the state-of-the-art research facility will help develop energy alternatives and extend Wyoming’s energy resources. Arch employees also support critical habitat studies and teach local students about coal mining and local wildlife preservation.

West Virginia: We partner with local elementary schools to provide financial assistance, volunteer support, student tours and annual fishing days. Arch employees also contribute thousands of hours to the Coal Education Development and Resource (CEDAR) center. CEDAR hosts an annual Coal Fair and provides 10 college scholarships worth $1,000 each to regional students.

Janiece Tuttle, a kindergarten teacher in Richfield, Utah, is one of 27 recipients of a 2011 Arch Coal Teacher Achievement Award. We salute our star teachers and the positive impact they make, which goes well beyond the walls of their schools.

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Doing Better, Together

Arch Coal fosters a culture of volunteerism. Causes that are important to our employees often become projects backed by the larger organization. Whether we’re mentoring children, supporting wildlife or joining forces with residents for a great cause, we dig into community projects with our hearts and hands.

In 2010, for example, St. Louis employees and families formed the “Arch Coal Fox Trotters” in memory of Jane Fox, a colleague who lost her battle with breast cancer. The Fox Trotters raised $3,873 for the Susan G. Komen Race for the Cure. Meanwhile, employees in Wyoming continued a five-year tradition of sponsoring their statewide race. At Cumberland River and Thunder Basin, employees and families raised about $35,000 in 2009 and 2010 for a different cause – the American Cancer Society Relay for Life.

As stewards of a natural resource, we also help communities enjoy the great outdoors. In Utah, Skyline mine employees helped rebuild a boardwalk at Benches Pond in the Manti-La Sal National Forest. The walkway provides better access for anglers with physical challenges. Arch’s Canyon Fuel Company also supports an annual fishing day for physically challenged children and adults at a pond in Helper, Utah.

Volunteerism among Arch employees heats up in the winter months. For the 2010 holiday season, we collected more than $98,263 in clothing, toys and monetary donations for underprivileged children and families. In Kentucky, employees collect and distribute nearly 40 truckloads of toys annually to Letcher County children.

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National Public Outreach

Going that extra mile is an important part of our company’s responsible culture. As a prime example, Arch Coal’s Thunder Basin Coal Company was named the exclusive recipient of the 2010 Public Outreach Award by the Interstate Mining Compact Commission for fostering awareness, cooperation, educational and community outreach. The mine’s efforts include hosting and sponsoring extensive educational programs with local schools, participating in critical habitat studies for sage grouse and ferruginous hawks, and welcoming neighboring ranchers for an annual luncheon.

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Supporting Our Troops

Arch Coal serves America. We show our support in many ways, from powering homes to honoring those who keep our country safe and secure. The U.S. Department of Defense’s Employer Support of the Guard and Reserve awarded Arch Coal and our Mountain Laurel complex with a statewide Pro Patria Award in Missouri and West Virginia, respectively. We were recognized for our leadership practices and personnel policies that support military employees and their families.

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A National Treasure

Energy. It’s a basic human need. Access to electricity increases life expectancy, lifts people out of poverty and drives industrialization. At Arch Coal, we are proud to play a major role in powering life.

In the U.S., we access one of the most plentiful reserves of coal in the world, which helps keep power prices lower for American families. On average, U.S. residents pay approximately $0.11 per kilowatt-hour, whereas citizens of Japan, the United Kingdom and Italy pay more than double that rate (see chart on top of page 23).

By growing our operations to 23 mining complexes, we’ve become one of the largest and most efficient coal producers in the world, serving more than 200 power plants and other end-users in more than 40 states. We produce 16 percent of the annual U.S. coal supply, enough fuel to meet the total electricity needs – residential, commercial and manufacturing – for approximately 24 million Americans.

Coal remains one of the most dominant global fuel sources, and the U.S. economy is a primary beneficiary. The U.S. coal mining industry generated 555,000 jobs (directly and indirectly) and contributed $65.7 billion total to the GDP in 2008, according to the National Mining Association. Plentiful U.S. coal reserves also keep America competitive in the global marketplace.

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Economic Impact

The direct taxes that Arch Coal and its subsidiaries pay help support local, state and federal governments and stimulate the U.S. economy. Arch Coal paid in excess of $526 million in taxes and royalties in 2010.

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Building Strong Relationships

We deliver high-quality coal almost everywhere, year-round. Customers benefit from our portfolio of transportation options strategically located throughout the United States. Our mines access every major U.S. railroad and the inland waterway system. We also export coal cost effectively from the Atlantic, Pacific and Gulf coasts and transload coal en route to Europe and Asia.

Arch emphasizes building strong relationships with a customer commitment that includes quality control, dependability and responsiveness. We solidify these long-term relationships by working one-on-one with our customers, listening and responding with solutions tailored to meet their needs. These solutions often include clean coal innovations that help U.S. customers comply with stricter environmental regulations, or new ways to control dust and temperature. We also blend coal products to satisfy customer specifications.

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Fuel of the Future

At Arch Coal, we believe technology is the key to unlocking a cleaner energy future. During the past decade, coal use worldwide increased 46 percent, according to the BP Statistical Review of World Energy, making it the fastest growing fuel source on the planet. Moreover, the International Energy Agency projects that rapid growth in global coal consumption will continue. Clearly, this trend underscores the need for advanced coal technologies in addressing climate and other environmental concerns.

The IEA calls carbon capture and storage (CCS) “one of the most important technological solutions to curb greenhouse gas emissions.” Given the strong likelihood that fossil fuels will still be a dominant global energy source at mid-century, CCS will be an essential tool in achieving stabilization of greenhouse gas (GHG) concentrations in the atmosphere at that time. In the words of Tony Blair, former UK prime minister, “developing carbon capture and storage technologies is not optional, it is literally of the essence.”

We also believe CCS can play a major role in “decarbonizing” the world’s transportation fleet. With more than 1 billion motorized vehicles worldwide today – and some experts projecting a doubling of the fleet in the next 20 years – converting an increasing percentage of vehicles to electricity may prove to be the most realistic and affordable way to cut transportation-related GHG emissions. Under such a scenario, centralized carbon capture at fossil-fuel-based power plants becomes even more critical.

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Emerging Technologies

We believe that the U.S. government must play a central role in the development and deployment of CCS and clean coal technologies over the next two decades. Consequently, we are seeking to promote legislation that would provide funding and other means of support for the development of such technologies, and to engage policymakers in Washington, D.C. and elsewhere to convey the importance of this task.

Arch also has invested in – and works closely with – the U.S. Department of Energy and ADA-ES, a technology company focused on emissions reductions, to develop and enhance mercury control technologies. The work includes the nation’s first full-scale mercury control program in cooperation with the DOE’s National Energy Technology Laboratory.

DKRW Advanced Fuels, in which Arch has an equity ownership position, plans to be among the first to capture and utilize CO2 generated in the coal-conversion process to enhance oil recovery.

In addition, Arch owns a 35-percent interest in Tenaska Trailblazer Partners, which plans to construct a pulverized, coal-fueled electric generating station targeting a post-combustion CO2 capture of  85 to 90 percent.

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