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                                                                   EXHIBIT 4.204

                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                        PEABODY DEVELOPMENT COMPANY, LLC


         THIS LIMITED LIABILITY COMPANY AGREEMENT ("Agreement") of PEABODY
DEVELOPMENT COMPANY, LLC, (the "LLC") is dated as of December 16, 2003 and made
by Peabody Holding Company, Inc., a Delaware Limited Liability Company (the
"Member").


                                   WITNESSETH:


         WHEREAS, the LLC is a limited liability company formed under the
Delaware Limited Liability Company Act (the "Delaware LLC Act") pursuant to a
Certificate of Formation filed with the Delaware Secretary of State on September
8, 2003; and

         WHEREAS, the Member is the sole member of the LLC.

         NOW, THEREFORE, the Member hereby declares as follows:

1.       LLC FORMATION, NAME, PLACE OF BUSINESS

         1.1      FORMATION OF LLC; CERTIFICATE OF FORMATION

         The Member of the LLC hereby acknowledges the formation of the LLC as a
limited liability company pursuant to the Delaware LLC Act by virtue of the
filing of a Certificate of Formation with the Delaware Secretary of State on
December 16, 2003.

         1.2      NAME OF LLC

         The name of the LLC as of the date of this Agreement is and shall
continue to be "Peabody Development Company, LLC". The business of the LLC may
be conducted under any other name that is permitted by the Delaware LLC Act and
selected by the Member. The Manager designated pursuant to the terms of this
Agreement promptly shall execute, file, and record any assumed or fictitious
name certificates required by the laws of the State of Delaware or any state in
which the LLC conducts business and shall take such other action as such Manager
determines is required by or advisable under the laws of the State of Delaware,
or any other state in which the LLC conducts business, to use the name or names
under which the LLC conducts business.

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         1.3      PLACE OF BUSINESS

         The LLC's principal place of business shall be St. Louis, MO. The
Manager may establish and maintain such other offices and additional places of
business of the LLC, either within or without the State of Delaware, or close
any office or place of business of the LLC, as he or she deems appropriate.

         1.4      REGISTERED AGENT

         The street address of the initial registered office of the LLC shall
be:

                  The Corporation Trust Company
                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, Delaware  19801

and the LLC's registered agent at such address shall be Corporation Service
Company. The Manager may from time to time appoint a new resident agent for the
LLC.


2.       PURPOSES AND POWERS OF LLC

         2.1      PURPOSES

         The purposes of the LLC shall be (i) to purchase mining equipment and
provide finance and credit support, (ii) to undertake any lawful transactions
and engage in any lawful activity incidental to or in furtherance of the
foregoing purpose or otherwise related to the business; and (iii) as agreed by
the Member, to engage in any other lawful business, purpose or activity
permitted by the Delaware LLC Act.

         2.2      POWERS

         The LLC shall have all the powers and privileges as are necessary or
convenient to the conduct, promotion, or attainment of the business, purposes or
activities of the LLC.


3.       TERM OF LLC


         The LLC commenced on the date upon which the Certificate of Formation
was duly filed with the Delaware Secretary of State and shall continue until the
dissolution of the LLC as provided by the Delaware LLC Act.



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4.       LIABILITY OF MEMBER AND MANAGER

         Except as otherwise provided in the Delaware LLC Act, the debts,
obligations and liabilities of the LLC, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the LLC,
and neither the Member nor the Manager, nor any director, officer, employee,
shareholder, controlling person or agent of the LLC or the Member shall be
obligated personally for any such debt, obligation or liability of the LLC
solely by reason of being a member or a manager, director, officer, employee,
shareholder, controlling person or agent of the LLC or the Member. The failure
of the LLC to observe any formalities or requirements relating to the exercise
of its power or management of its business or affairs under the Delaware LLC Act
or this Agreement shall not be grounds for imposing personal liability on the
Member, the Manager, or any director, officer, employee, shareholder,
controlling person or agent of the LLC or the Member for liabilities of the LLC.


5.       CAPITALIZATION, MEMBERSHIP INTEREST AND DISTRIBUTIONS OF CASH FLOW AND
         CERTAIN PROCEEDS.

         5.1      CAPITALIZATION

         Concurrent with the execution of this Agreement, the Member shall make
a $1,000 capital contribution to the LLC, in cash.

         5.2      NO ADDITIONAL CAPITAL CONTRIBUTIONS

         The Member shall have no obligation to make additional capital
contributions to the LLC.

         5.3      MEMBERSHIP INTEREST

         The Member shall own one hundred percent (100%) of the membership
interests in the LLC, and all profits and losses shall be allocated to the
Member.

         5.4      DISTRIBUTIONS

         The Member shall decide whether and in what amounts the proceeds
received by the LLC shall be distributed. All such proceeds, if any, shall be
distributed one hundred percent (100%) to the Member.






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6.       MANAGEMENT

         6.1      MEMBER MANAGEMENT

         Except as otherwise expressly provided in this Agreement, the business
affairs of the LLC shall be managed and controlled by the Member, and the Member
shall have fully, exclusive, and complete authority and discretion to make all
the decisions affecting the business and affairs of the LLC, and to take all
such actions as the member deems necessary or appropriate to accomplish the
purposes of the LLC; and any action taken by the Member shall be binding on the
LLC.


7.       INDEMNIFICATION OF MEMBER, MANAGER REPRESENTATIVES, COMMITTEE MEMBERS
         AND EMPLOYEES

         7.1      INDEMNIFICATION

         The LLC shall indemnify and hold harmless the Member, the Manager and
each director, officer, employee, shareholder, controlling person, agent and
representative of the LLC and of the Member (individually, in each case, an
"Indemnitee") to the fullest extent permitted by law from and against any and
all losses, claims, demands, costs, damages, liabilities (joint or several),
reasonable expenses of any nature (including reasonable attorneys' fees and
disbursements), judgments, fines, settlements, and other amounts arising from
any and all claims, causes of action, demands, actions, suits, or proceedings
(unless asserted by the LLC against the Indemnitee), whether civil, criminal,
administrative or investigative, in which the Indemnitee may be involved, or
threatened to be involved, as a party or otherwise, arising out of or incidental
to the business or activities of or relating to the LLC (a "Claim"), regardless
of whether such Indemnitee continues to be a Member or Manager or a director,
officer, employee, shareholder, controlling person, agent or representative of
the LLC or the Member at the time any such liability or expense is paid or
incurred, if such Indemnitee determined in good faith that such conduct was in
the best interest of the LLC and such Indemnitee's conduct did not constitute
fraud, gross negligence, or willful misconduct and was within the scope of the
Indemnitee's authority; provided that all claims for indemnification by an
Indemnitee shall be made only against and shall be limited to the assets of the
LLC and no Indemnitee shall have recourse against the Member with respect to any
such Claim. The termination of any action, suit, or proceeding by judgment,
order, settlement, or conviction, or upon a plea of nolo contendre or its
equivalent shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee's conduct did constitute fraud, gross
negligence, or willful misconduct.


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         7.2      EXPENSES

         Expenses incurred by an Indemnitee in defending any Claim subject to
this SECTION 7 shall, from time to time, upon request by the Indemnitee, be
advanced by the LLC prior to the final disposition of such Claim upon receipt by
the LLC of an undertaking by or on behalf of the Indemnitee to repay such
amount, together with interest on any such advance or advances at the rate equal
to two percentage points above the "Federal short-term rate" as defined in the
Internal Revenue Code section 1274(d)(1)(C)(i) or the maximum rate permitted
under applicable law, promptly upon (and in no event more than ten days after) a
determination in a judicial proceeding or a binding arbitration that such
Indemnitee is not entitled to be indemnified as authorized in this SECTION 7.

         7.3      OTHER RIGHTS

         The indemnification provided by this SECTION 7 shall be in addition to
any other rights to which an Indemnitee may be entitled under any agreement or
as approved by the Member, as a matter of law or equity, or otherwise, both as
to an action in such Indemnitee's capacity as the Member or Manager or as a
director, officer, employee, shareholder, controlling person, agent or
representative of the LLC or the Member, and as to an action in another
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity with respect to those periods during which such Indemnitee served, and
shall inure to the benefit of the heirs, successors, assigns, and administrators
of the Indemnitee.

         7.4      NOTICE

         Promptly after receipt of notice of the commencement of any Claim, an
Indemnitee will, if indemnification in respect thereof is to be sought against
the LLC under this SECTION 7, notify the LLC of the initiation thereof, but the
omission so to notify the LLC will not relieve the LLC from any liability that
the LLC may have to such Indemnitee otherwise than under this SECTION 7, or
under this SECTION 7 except to the extent that the LLC is adversely affected by
such lack of notice.

         7.5      COUNSEL

         The LLC shall have the right to undertake, by counsel or other
representatives of its own choosing, the defense or other resolution of any
Claim. In the event that the LLC shall elect not to undertake such defense or
other resolution or within a reasonable time after notice of such Claim from an
Indemnitee, the LLC shall fail to defend or otherwise resolve such Claim, such
Indemnitee (upon further written notice to the LLC) shall have the right to
undertake the defense, compromise, or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the LLC.


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         7.6      OTHER PERSONS

         The provisions of this SECTION 7 are for the benefit of the Indemnitees
and shall not be deemed to create any rights for the benefit of any other person
or entity.

         7.7      INSURANCE

         The LLC may purchase and maintain insurance of a kind normal and
customary in the industry in which the LLC conducts business on behalf of any
Indemnitee against any liability asserted against an Indemnitee and incurred by
an Indemnitee in such capacity, or arising out of such Indemnitee's status as
aforesaid, whether or not the LLC would have the power to indemnify such
Indemnitee against such liability under this SECTION 7.


8.       DISSOLUTION AND LIQUIDATION

         8.1      EFFECT OF DISSOLUTION

         Upon dissolution, the LLC shall cease carrying on its business but
shall not terminate until the winding up of the affairs of the LLC is completed,
the assets of the LLC shall have been distributed as provided below and a
Certificate of Cancellation of the LLC under the Delaware LLC Act has been filed
with the Secretary of State of the State of Delaware.


         8.2      LIQUIDATION UPON DISSOLUTION

         Upon the dissolution of the LLC, sole and plenary authority to
effectuate the liquidation of the assets of the LLC shall be vested in the
Manager, which shall have full power and authority to sell, assign and encumber
any and all of the LLC's assets and to wind up and liquidate the affairs of the
LLC in an orderly and business-like manner. The proceeds of liquidation of the
assets of the LLC distributable upon a dissolution and winding up of the LLC
shall be applied in the following order of priority:

         (i) first, to the creditors of the LLC, which may include the Member as
a creditor, in the order of priority provided by law, in satisfaction of all
liabilities and obligations of the LLC (or any nature whatsoever, including,
without limitation, fixed or contingent, matured or unmatured, legal or
equitable, secured or unsecured), whether by payment or the making of reasonable
provisions for payment thereof; and


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         (ii) thereafter, one hundred percent (100%) to the Member.


         8.3      WINDING UP AND CERTIFICATE OF CANCELLATION

         The winding up of the LLC shall be completed when all of its debts,
liabilities, and obligations have been paid and discharged or reasonably
adequate provisions therefor has been made, and all of the remaining property
and assets of the LLC have been distributed to the Member. Upon the completion
of the winding up of the LLC, a Certificate of Cancellation of the LLC shall be
filed with the Delaware Secretary of State.


9.       AMENDMENT

         This Agreement may be amended or modified by a written instrument
executed by the Member.


10.      GOVERNING LAW

         This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware without regard to any applicable conflicts of law.

         IN WITNESS WHEREOF, the undersigned has duly executed this Agreement,
as of the day and year first herein above set forth.


                                      PEABODY ENERGY CORPORATION


                                      By:
                                          -------------------------------------
                                      Name: Walter L. Hawkins, Jr.
                                          --------------------------------------
                                      Title:     Vice President
                                          --------------------------------------


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