Anglo sells Australian coal mines for up to $3.78 billion to Peabody

Anglo American agreed on Monday to sell the remaining Australian steelmaking mines to Peabody Energy, for up to $3.78 Billion in cash. This is its first large disposal under a restructuring plan.

After fending off BHP Group's $49 billion bid in May, the mining giant has reshaped its business to focus mainly on iron ore and copper. The London-listed company is hoping that the sale will satisfy investors and deter unwanted suitors.

Anglo American released a statement that the cash consideration agreed upon by Peabody included an upfront payment at completion of $2.05 Billion, deferred consideration of $725 Million, and the potential of up to $550 MILLION in a price linked earnout. It also included contingent consideration of $450 MILLION tied to the reopening the Grosvenor Mine.

Peabody has agreed to buy Moranbah North in Australia, Grosvenor in Australia, Aquila and Capcoal. Peabody announced that Anglo's Dawson Mine will be sold for $455 Million to Indonesia's PT Bukit Makmur Mandiri Utama as part of a two-for-one transaction.

Anglo rejected BHP's three previous approaches. A six-month moratorium on an additional approach by BHP is set to expire on Friday, under UK takeover regulations.

Anglo also sold its minority stakes in the Jellinbah East steelmaking coal mines and Lake Vermont iron ore mines, both in Australia. The joint venture owned these mines for $1.1 billion.

Anglo's restructure plan includes selling off underperforming assets such as platinum, nickel, and diamonds to concentrate on copper. Copper is a key metal for the clean energy shift and rapid growth of artificial intelligence.

Anglo American Platinum is expected to be spun out of South Africa's coal unit by the middle of 2025.

Anglo American said that it also expects De Beers, as part of the group's efforts to separate this business, to follow suit.

(source: Reuters)