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                                                                    EXHIBIT 4.24


                   SEVENTH SUPPLEMENTAL SENIOR NOTE INDENTURE

         SEVENTH SUPPLEMENTAL SENIOR NOTE INDENTURE (this "Supplemental Senior
Note Indenture"), dated as of August 14, 2002 among BEAVER DAM COAL COMPANY, a
Delaware corporation (the "Guaranteeing Subsidiary"), a subsidiary of Peabody
Energy Corporation (formerly P&L Coal Holdings Corporation) (or its permitted
successor), a Delaware corporation (the "Company") the Company, the other Senior
Note Guarantors (as defined in the Senior Note Indenture referred to herein) and
State Street Bank and Trust Company, as Senior Note Trustee under the Senior
Note Indenture referred to below (the "Senior Note Trustee").

                                   WITNESSETH

         WHEREAS, the Company has heretofore executed and delivered to the
Senior Note Trustee a Senior Note Indenture (the "Senior Note Indenture"), dated
as of May 18, 1998 providing for the issuance of an aggregate principal amount
of up to $550.0 million of 8-7/8% Senior Notes due 2008 (the "Senior Notes");

         WHEREAS, the Senior Note Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Senior Note Trustee a supplemental Senior Note Indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's
Obligations under the Senior Notes and the Senior Note Indenture on the terms
and conditions set forth herein (the "Senior Subsidiary Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Senior Note Indenture, the
Senior Note Trustee is authorized to execute and deliver this Supplemental
Senior Note Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Senior Note Trustee mutually covenant and agree
for the equal and ratable benefit of the Holders of the Senior Notes as follows:

         1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Senior Note Indenture.

         2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as
follows:

            (a)   Along with all Senior Note Guarantors named in the Senior Note
                  Indenture, to jointly and severally Guarantee to each Holder
                  of a Senior Note authenticated and delivered by the Senior
                  Note Trustee and to the Senior Note Trustee and its successors
                  and assigns, irrespective of the validity and enforceability
                  of the Senior Note Indenture, the Senior Notes or the
                  obligations of the Company hereunder or thereunder, that:

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                  (i)      the principal of and interest on the Senior Notes
                           will be promptly paid in full when due, whether at
                           maturity, by acceleration, redemption or otherwise,
                           and interest on the overdue principal of and interest
                           on the Senior Notes, if any, if lawful, and all other
                           obligations of the Company to the Holders or the
                           Senior Note Trustee hereunder or thereunder will be
                           promptly paid in full or performed, all in accordance
                           with the terms hereof and thereof; and

                  (ii)     in case of any extension of time of payment or
                           renewal of any Senior Notes or any of such other
                           obligations, that same will be promptly paid in full
                           when due or performed in accordance with the terms of
                           the extension or renewal, whether at stated maturity,
                           by acceleration or otherwise. Failing payment when
                           due of any amount so guaranteed or any performance so
                           guaranteed for whatever reason, the Senior Note
                           Guarantors shall be jointly and severally obligated
                           to pay the same immediately.

         (b)      The obligations hereunder shall be unconditional, irrespective
                  of the validity, regularity or enforceability of the Senior
                  Notes or the Senior Note Indenture, the absence of any action
                  to enforce the same, any waiver or consent by any Holder of
                  the Senior Notes with respect to any provisions hereof or
                  thereof, the recovery of any judgment against the Company, any
                  action to enforce the same or any other circumstance which
                  might otherwise constitute a legal or equitable discharge or
                  defense of a Senior Note Guarantor.

         (c)      The following is hereby waived: diligence, presentment, demand
                  of payment, filing of claims with a court in the event of
                  insolvency or bankruptcy of the Company, any right to require
                  a proceeding first against the Company, protest, notice and
                  all demands whatsoever.

         (d)      This Senior Subsidiary Guarantee shall not be discharged
                  except by complete performance of the obligations contained in
                  the Senior Notes and the Senior Note Indenture.

         (e)      If any Holder or the Senior Note Trustee is required by any
                  court or otherwise to return to the Company, the Senior Note
                  Guarantors, or any custodian, Senior Note Trustee, liquidator
                  or other similar official acting in relation to either the
                  Company or the Senior Note Guarantors, any amount paid by
                  either to the Senior Note Trustee or such Holder, this Senior
                  Subsidiary Guarantee, to the extent theretofore discharged,
                  shall be reinstated in full force and effect.

         (f)      The Guaranteeing Subsidiary shall not be entitled to any right
                  of subrogation in relation to the Holders in respect of any
                  obligations


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                  guaranteed hereby until payment in full of all obligations
                  guaranteed hereby.

         (g)      As between the Senior Note Guarantors, on the one hand, and
                  the Holders and the Senior Note Trustee, on the other hand,
                  (x) the maturity of the obligations guaranteed hereby may be
                  accelerated as provided in Article 6 of the Senior Note
                  Indenture for the purposes of this Senior Subsidiary
                  Guarantee, notwithstanding any stay, injunction or other
                  prohibitions preventing such acceleration in respect of the
                  obligations guaranteed hereby, and (y) in the event of any
                  declaration of acceleration of such obligations as provided in
                  Article 6 of the Senior Note Indenture, such obligations
                  (whether or not due and payable) shall forthwith become due
                  and payable by the Senior Note Guarantors for the purpose of
                  this Senior Subsidiary Guarantee.

         (h)      The Senior Note Guarantors shall have the right to seek
                  contribution from any non-paying Senior Note Guarantor so long
                  as the exercise of such right does not impair the rights of
                  the Holders under the Senior Subsidiary Guarantee.

         (i)      Pursuant to Section 10.04 of the Senior Note Indenture, after
                  giving effect to any maximum amount and any other contingent
                  and fixed liabilities that are relevant under any applicable
                  Bankruptcy or fraudulent conveyance laws, and after giving
                  effect to any collections from, rights to receive contribution
                  from or payments made by or on behalf of any other Senior Note
                  Guarantor in respect of the obligations of such other Senior
                  Note Guarantor under Article 10 of the Senior Note Indenture
                  shall result in the obligations of such Senior Note Guarantor
                  under its Senior Subsidiary Guarantee not constituting a
                  fraudulent transfer or conveyance.

         3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the
Senior Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Senior Note a notation of such
Senior Subsidiary Guarantee.

         4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

            (a)   The Guaranteeing Subsidiary may not consolidate with or merge
                  with or into (whether or not such Senior Note Guarantor is the
                  surviving Person) another corporation, Person or entity
                  whether or not affiliated with such Senior Note Guarantor
                  unless:

                  (i)      subject to Section 10.04 of the Senior Note
                           Indenture, the Person formed by or surviving any such
                           consolidation or merger (if other than a Senior Note
                           Guarantor or the Company) unconditionally assumes all
                           the obligations of such Senior Note Guarantor,


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                           pursuant to a supplemental Senior Note Indenture in
                           form and substance reasonably satisfactory to the
                           Senior Note Trustee, under the Senior Notes, the
                           Senior Note Indenture and the Senior Subsidiary
                           Guarantee on the terms set forth herein or therein;
                           and

                  (ii)     immediately after giving effect to such transaction,
                           no Default or Event of Default exists.

            (b)   In case of any such consolidation, merger, sale or conveyance
                  and upon the assumption by the successor corporation, by
                  supplemental Senior Note Indenture, executed and delivered to
                  the Senior Note Trustee and satisfactory in form to the Senior
                  Note Trustee, of the Senior Subsidiary Guarantee endorsed upon
                  the Senior Notes and the due and punctual performance of all
                  of the covenants and conditions of the Senior Note Indenture
                  to be performed by the Senior Note Guarantor, such successor
                  corporation shall succeed to and be substituted for the Senior
                  Note Guarantor with the same effect as if it had been named
                  herein as a Senior Note Guarantor. Such successor corporation
                  thereupon may cause to be signed any or all of the Senior
                  Subsidiary Guarantees to be endorsed upon all of the Senior
                  Notes issuable hereunder which theretofore shall not have been
                  signed by the Company and delivered to the Senior Note
                  Trustee. All the Senior Subsidiary Guarantees so issued shall
                  in all respects have the same legal rank and benefit under the
                  Senior Note Indenture as the Senior Subsidiary Guarantees
                  theretofore and thereafter issued in accordance with the terms
                  of the Senior Note Indenture as though all of such Senior
                  Subsidiary Guarantees had been issued at the date of the
                  execution hereof.

            (c)   Except as set forth in Articles 4 and 5 of the Senior Note
                  Indenture, and notwithstanding clauses (a) and (b) above,
                  nothing contained in the Senior Note Indenture or in any of
                  the Senior Notes shall prevent any consolidation or merger of
                  a Senior Note Guarantor with or into the Company or another
                  Senior Note Guarantor, or shall prevent any sale or conveyance
                  of the property of a Senior Note Guarantor as an entirety or
                  substantially as an entirety to the Company or another Senior
                  Note Guarantor.

         5. RELEASES.

            (a)   In the event of a sale or other disposition of all of the
                  assets of any Senior Note Guarantor, by way of merger,
                  consolidation or otherwise, or a sale or other disposition of
                  all to the capital stock of any Senior Note Guarantor, then
                  such Senior Note Guarantor (in the event of a sale or other
                  disposition, by way of merger, consolidation or otherwise, of
                  all of the capital stock of such Senior Note Guarantor) or the
                  corporation acquiring the property (in the event of a sale or
                  other disposition of all or


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                  substantially all of the assets of such Senior Note Guarantor)
                  will be released and relieved of any obligations under its
                  Senior Subsidiary Guarantee; provided that the Net Proceeds of
                  such sale or other disposition are applied in accordance with
                  the applicable provisions of the Senior Note Indenture,
                  including without limitation Section 4.10 of the Senior Note
                  Indenture. Upon delivery by the Company to the Senior Note
                  Trustee of an Officer's Certificate and an Opinion of Counsel
                  to the effect that such sale or other disposition was made by
                  the Company in accordance with the provisions of the Senior
                  Note Indenture, including without limitation Section 4.10 of
                  the Senior Note Indenture, the Senior Note Trustee shall
                  execute any documents reasonably required in order to evidence
                  the release of any Senior Note Guarantor from its obligations
                  under its Senior Subsidiary Guarantee.

            (b)   Any Senior Note Guarantor not released from its obligations
                  under its Senior Subsidiary Guarantee shall remain liable for
                  the full amount of principal of and interest on the Senior
                  Notes and for the other obligations of any Senior Note
                  Guarantor under the Senior Note Indenture as provided in
                  Article 10 of the Senior Note Indenture.

         6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Senior Notes, any Senior Subsidiary
Guarantees, the Senior Note Indenture or this Supplemental Senior Note Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of the Senior Notes by accepting a Senior Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Senior Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.

         7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL SENIOR NOTE INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

         8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Senior Note Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.

         9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.


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         10. THE SENIOR NOTE TRUSTEE. The Senior Note Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Senior Note Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by the
Guaranteeing Subsidiary and the Company.

         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Senior Note Indenture to be duly executed and attested, all as of the date first
above written.


                                             BEAVER DAM COAL COMPANY


                                              /s/ STEVEN F. SCHAAB
                                             ----------------------------------
                                             Name:  S. F. Schaab
                                             Title:  Vice President





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