Peabody Abandons Plans to Acquire Anglo's Steelmaking Coal Asset Portfolio
In a surprising turn of events, Anglo American and Peabody have announced the termination of their agreement to sell Anglo American's steelmaking coal portfolio to Peabody, citing a material adverse change (MAC) as the reason.
The MAC was triggered by an ignition event at Anglo American's Moranbah North mine in the Bowen Basin, Queensland. This unfortunate incident led to an evacuation due to dangerous levels of carbon monoxide.
Anglo American, in a statement, expressed disappointment over Peabody's decision to terminate the transaction. The company's CEO, Duncan Wanblad, believes that what happened at Moranbah does not constitute a MAC under the sale agreements with Peabody.
In a separate statement, Wanblad reaffirmed Anglo American's commitment to its steelmaking coal assets. He stated that they are confident in their belief that what happened at Moranbah does not constitute a MAC.
Peabody, on the other hand, intends to create value from its diversified global asset portfolio. The company's portfolio includes growing exposure to seaborne metallurgical coal, a low-cost seaborne thermal coal platform, and a leading U.S. thermal coal position.
The sale, which was announced by Anglo American in November 2024, was valued at US$3.78 billion. The portfolio primarily consists of an 88 percent interest in the Moranbah North joint venture, a 70 percent interest in the Capcoal joint venture, and an 86.36 percent interest in the Roper Creek joint venture.
Anglo American reserves rights under the definitive agreements and plans to initiate an arbitration for wrongful termination. Peabody, however, has stated that the companies did not reach a revised agreement to cure the MAC.
This development comes as Anglo American has recently signed off the risk assessment that underpins the restart strategy for Moranbah North mine. The company remains committed to reopening the mine and resuming operations as soon as it is safe to do so.
As the situation unfolds, both companies are expected to provide further updates on the matter.
