Anglo American sells steelmaking coal unit to Peabody for $3.77bn

Anglo American has agreed to sell its portfolio of steelmaking coal mines that it operates in Australia to Peabody Energy for $3.77bn in cash as part of its pivot to be a copper, premium iron ore and crop nutrients business.

The deal follows the mining giant’s sale of its interest in the Jellinbah coal mine in Queensland, Australia for $1.1bn earlier this month.

Anglo is restructuring its business by selling and divesting unwanted assets after it fended off a $49bn takeover bid from Australia’s BHP Group in May.

It has a portfolio of five steelmaking coal assets in Australia - Moranbah North, Grosvenor, Capcoal, Dawson and Jellinbah.

The sales process is expected to finish by the end of November, when a freeze on BHP making an approach for Anglo set under UK takeover law expires.

Anglo chief executive Duncan Wanblad said all the transactions to deliver its portfolio changes were “well in train”, with the demerger of Anglo American Platinum expected by mid-2025.

“We have seen strong interest in our nickel business with the sale process well progressed. We expect De Beers to follow, recognising its unmatched industry and brand position and good progress in working with stakeholders to position the business for long term success as we work toward separation for value.”

Peabody's offer comprises $2.05bn in cash at completion; deferred cash consideration of $725m; the potential for up to $550m in a price-linked earnout; and contingent cash consideration of $450m linked to the reopening of the Grosvenor mine.

Reporting by Frank Prenesti for Sharecast.com