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UPDATE 2-Peabody Energy cuts 2012 capex amid weak coal demand
* Cuts 2012 capital budget by $200 mln
* Expects Australian coal output reaching 45-50 mln tons by 2015-17
* Says "opportunistically" bought back $100 mln of shares
June 27 (Reuters) - Peabody Energy Corp, the largest U.S. coal miner, cut its capital budget for the year by about 8 percent at a time when demand for U.S. thermal coal remains weak.
U.S. coal producers have been hurt as power companies increasingly switch to cheaper natural gas.
Natural gas, whose prices have dipped to decade-lows due to a glut, has been cheaper than coal since 2010.
Peabody cut its capital expenditure by $200 million to $1.0 billion to $1.2 billion for the year.
Arch Coal Inc last week cut about a tenth of its workforce, closed three higher-cost mining complexes and cutback capital spending.
Peabody, however, remains optimistic about the long-term demand.
"There are bright spots amid recent market headwinds," Chief Executive Officer Gregory Boyce said in a statement.
He cited the rise in quarterly seaborne metallurgical coal prices, rising China coal imports, and growing electricity generation and steel production in the Asia-Pacific region as positives.
The company said it expects Australian coal production to reach 45 million to 50 million tons between 2015 and 2017 as it completes a number of late-stage projects. Coal output from Australia was 25 million tons in 2011.
Peabody, which has lost more than a third of its market value this year, said it "opportunistically" bought back $100 million of its shares in the second quarter.
Peabody shares were trading up 2 percent at $21.59 on Wednesday on the New York Stock Exchange. They rose 4 percent earlier in the session.
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