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5th International Industry Summit on

Mining Performance
May 11, 2011
Rapid City, South Dakota

Keynote Address: Colin Marshall


President & CEO
Cloud Peak Energy
Agenda

Safety Share

Background - Cloud Peak Energy

Priorities going forward

Business Improvement culture

Business Improvement projects

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Safety Share

Safety should not be compromised just because it is a temporary situation

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Background

Rio Tinto Energy America formed through acquisitions 1993 – 1998


2008 Rio Tinto decided to divest to reduce Alcan purchase debt
2008 Colowyo mine retained by Rio Tinto
Jacobs Ranch Mine sold to Arch Coal
Cloud Peak Energy Inc. – IPO November 2009
Traded NYSE – ticker symbol “CLD”
Secondary offering completed divestment – Dec 2010

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Cloud Peak Energy’s Mines
Spring Creek Mine
2010 Tons Sold 19.3m tons
2010 Proven & Probable Reserves 329m tons
Reserve Coal Quality 9.350 BTU/lb

Cordero Rojo Mine


2010 Tons Sold 38.5m tons
2010 Proven & Probable Reserves 385m tons
Reserve Coal Quality 8,425 BTU/lb
Antelope Mine
2010 Tons Sold 35.9m tons
2010 Proven & Probable Reserves 252m tons
Reserve Coal Quality 8,850 BTU/lb

Headquartered in Gillette, WY

Third-largest U.S. coal producer

Only pure-play, Powder River Basin (PRB)


coal company

Three large surface mines producing


low-sulfur, high-quality, sub-bituminous
coal with an emphasis on safety

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Safety
Top 25 Coal Producing Companies - 2010 Preliminary Incident Rates (MSHA)

Source: MSHA
Note: Total Incident rate = (total number of employee incidents X 200,000 / total man-hours.

As of May 2, 2011 Antelope Mine has worked 6 million man hours without an LTI
A portion of all employees’ bonuses are tied to safety
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Environmental

Cloud Peak Energy is the only coal mining company in the Powder River Basin
with ISO 14001 (environmental) and OHSAS 18001 (safety)
Cloud Peak Energy has award-winning reclamation practices, including wildlife
habitat redevelopment
National Excellence in Surface Mining and Reclamation awards received 6 of the
last 8 years, including 2009 and 2010.

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Priorities Going Forward

Maximize operational performance


Build from
Build cash reserves and financial strength
Existing
Invest in capital and reserves at existing mines
Foundation
Look for external reserves and assets to add value

Business Improvement: a key factor in


achieving success

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Effective BI Culture

Involvement
Senior Management – Sponsors
Communication

Functional Management – Project Leaders

Employees – Project Team Members

BI Facilitators - Enablers

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BI Guiding Principles

Align with corporate initiatives, objectives and goals


Value based, process oriented, data and results driven
Projects identified in the workplace
Communicate effectively
Engage leadership
Cooperative projects with suppliers and customers

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Hybrid Robust Methodology
Structured Process

Lean
Six Sigma
Theory of Constraints
Proprietary Tools & Techniques
Hard and Soft Savings
12 month value tracking

Key is applying the correct tool or technique

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2009 & 2010 Results

2009 2010

BI Hard Savings - $Millions 6.2 10.9


Total Projects 41 54
Projects With Hard Savings 33 41
Projects With Soft Savings Only
8 13

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Active Projects & Pipeline 2011

Target Area Achieving In Future


Value Development Opportunities
Safety 1 11 22
Capital Cost 2 17 23
Operations Cost 27 46 83
Asset Utilization 9 7 17
Cycle Time 4 3 10
Quality 5 10 35
Environment 2 3 12

Total 50 97 202

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Active Projects - 2011

Payload Optimization
Oil Analysis & Lubricants
Vibration Analysis

Pipe Strain Test


Equipment Availability
Maintenance Department Overtime

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Active Projects - 2011

Recruiting Effectiveness
Logistics – Parts & Supplies Delivery
Safety Interactions

Fuel Tracking System


Fuel Island
Oilers Inpit Location
Optimize Cast Blast Patterns

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BI 5 Year Plan 2007 - 2011
2007 2008 2009 2010 2011
Benchmarking the Plan

5S across the Organization

Visual Standards Pilot

Standardize Work – Key Processes

Total Productive Maintenance – IPT

Quick Changeover Pilot

Leadership Culture “Lean Principles”

Tools - Bottlenecks

Lean

Six Sigma

Root Cause Analysis

Effective BI Systems

Structured BI Processes

Understanding Infrastructure Embedding / Systematizing Improvement Culture

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BI 5 Year Plan 2011 - 2015
2011 2012 2013 2014 2015

Grow the BI Culture


Implement Structured Methodology
Expertise of BI Facilitators & Leaders
Budget-able Savings
Vendor Based Initiatives 3 4 5 6 6
Employee Participation - BI Projects 17% 22% 27% 32% 35%
Realized Hard Savings - $ Millions 6.5 7.5 8.5 8.5 8.5

Development, Training & Implementation

Adjustments

In Production

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BI at Cloud Peak Energy

An ongoing part of our business

Everyone’s responsibility

Flexible approach

Value driven

Sustainability

Interactive Management

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Questions?

Questions?
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