When you're a king, the resources at your disposal permit you to look in multiple directions to expand your empire.

Likewise, the king of coal -- Peabody Energy (NYSE: BTU) -- sits upon a throne of possibilities that permits the miner to pursue growth on multiple fronts where conditions allow.

Looking back, that same flexibility permitted a timely disposal of Appalachian assets through the spinoff of Patriot Coal (NYSE: PCX) in 2007. Since falling demand and cheap natural gas ravaged the domestic coal industry in 2009, the Appalachian region has been the slowest to recover.

With a diverse portfolio of assets that commonly conceal untapped productive potential, however, Peabody Energy is in a position to expand in the right places at the right time.

Peabody continues to place considerable emphasis upon production growth initiatives under way in Australia to address this persistently epic Pan-Asian demand environment. Undaunted by the failure to acquire Macarthur Coal earlier this year, Peabody continues to chase a rapid expansion of Australian production to 40 million tons annually by 2014.

Meanwhile, Peabody is battling to expand production on another front that some Fools may find surprising. After all, tangible or sustainable growth has been a noteworthy rarity throughout the industrial subsectors of the domestic U.S. economy. Peabody considers the Illinois basin "one of the fastest-growing markets in the United States," and this week announced plans to expand production at its Gateway mine in Illinois by more than 40% over the next several years. The plan also calls for a 16-year expansion of the mine's productive lifespan. The Gateway mine presently delivers coal to utilities including Progress Energy (NYSE: PGN).

At 3.4 tons of production, Gateway accounted for 10% of the miner's 2009 output from the Illinois Basin overall. Even with a 40% expansion to 4.5 million tons, the Gateway mine's proportion of Peabody's regional output is destined to decline as the massive Bear Run mine in Indiana ramps up toward its goal of 8 million tons annually. Taken together, however, these two projects underlie a growing footprint of dominance in the Illinois Basin that consolidates Peabody's reign as the king of coal.

As I predicted, coal mining stocks delivered solid shareholder returns in 2009. Thus far in 2010, the flat trajectory of the Market Vectors Coal ETF (NYSE: KOL) lies in contrast to a normalizing steam coal market and continued demand growth for metallurgical coal. These conditions have me anticipating a strong close to the year from leading coal producers like Peabody Energy, Alpha Natural Resources (NYSE: ANR) and even from heavily impaired Appalachian producers like Massey Energy (NYSE: MEE).

Fool contributor Christopher Barker is the Nat King of Coal and the wild boar of iron ore. He can be found blogging actively and acting Foolishly in the Motley Fool CAPS community under the user name TMFSinchiruna. He tweets. He owns shares of Market Vectors Coal ETF, Massey Energy, and Peabody Energy. Try any of our Foolish newsletters today, free for 30 days.

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