Peabody Energy Corp. reported its coal shipments from Western mines increased in the second quarter of the year, the company said Tuesday, but weak market conditions in Australia kept the St. Louis-based firm in the red.

The company's loss for the three months between April and June was $72 million. 

Its Western mines were a bright spot by comparison. Peabody, which owns and operates the North Antelope Rochelle mine south of Gillette, said domestic mining revenues rose to $1.03 billion, about a 6 percent increase, on the back of better prices and increased shipments from its western mines. 

“Peabody’s U.S. operations delivered higher second-quarter results, and our Australian platform completed multiple operational milestones and improved costs in the face of challenging market conditions,” Peabody Energy Chairman and CEO Gregory H. Boyce said in a statement.

The domestic coal market showed signs of rebounding, the company said, after months of contending with low natural gas prices.

American coal generation was up 6 percent through the first half of the year, with coal accounting for 41 percent of the country's electricity generation. U.S. coal demand in 2014 is expected to increase 30 million to 40 million tons above 2013 levels, the company said. 

But challenges remain. Rail congestion continues to plague Powder River Basin mines.

What the company called "transportation concerns" cost Peabody 15 million tons in coal shipments and prompted some utilities to employ coal conservation measures at their plants. 

The announcement of transportation challenges was especially notable, as rail congestion has largely been a problem in the northern part of the Powder River Basin. A combination of increased oil shipments, agricultural shipments and bad weather has slowed shipments there. 

North Antelope Rochelle is in the basin's southern reaches, and the company had previously said it had avoided the issues faced by its counterparts. Peabody did not elaborate on the rail troubles it faced at the mine. 

The company's bigger worries were over its Australian sales. Peabody's revenues Down Under were down 5 percent on the quarter due to lower prices. Those losses offset the improved sales from Western mines in the U.S. 

Reach energy reporter Benjamin Storrow at 307-335-5344 or benjamin.storrow@trib.com. Follow him on Twitter @bstorrow

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