(Bloomberg) — Anglo American Plc said it’s agreed to sell its steelmaking coal business to Peabody Energy for a fee that could rise to as much as $3.78 billion, as the miner’s restructuring gathers pace.
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Anglo is looking to dramatically simplify — and shrink — its business in a move that was announced during a successful rebuttal of a $49 billion approach from BHP Group earlier this year. Selling its coal operations was seen as the most straightforward first step in the process — which also involves exiting platinum, nickel and selling or spinning off De Beers — but it was hampered by an explosion and fire at Grosvenor, the largest of its five Australian mines.
“The sale of our steelmaking coal business is another important step towards delivering the strategy that we set out in May to create a world class copper, premium iron ore and crop nutrients business,” Anglo Chief Executive Officer Duncan Wanblad said in a statement announcing the sale Monday.
Anglo said it would get $2.05 billion in cash upfront from Peabody, a US coal miner, with another $725 million in deferred payment. The company could receive a further $550 million depending on the coal price and $450 million depending on the rehabilitation of its Grosvenor mine.
The business spans five mines in Queensland, which together produced 16 million tons of coking coal in 2023. More than a dozen potential buyers ran the rule over the assets.
Anglo previously sold a $1.05 billion stake in another Australian coal mine.
(Updates with comment from Anglo CEO in third paragraph)
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