Peabody walks away from $3.8bn purchase of Anglo American's steelmaking coal mines

In November 2024 Anglo American agreed to sell the remainder of its Australian metallurgical coal business, which produces 15 to 17 million tonnes a year, to US coal group Peabody Energy for up to about $3.8bn in cash. The package was made up of $2.05bn upfront, $725m in deferred payments, a price-linked earn-out of up to $550m and $450m contingent on the reopening of the Grosvenor mine, which had been shut after an underground gas explosion in mid-2024. Peabody paid a $75m deposit on signing.

Together with the earlier sale of its one-third stake in the Jellinbah Group to Zashvin for about $1bn, the Peabody deal was meant to take Anglo's proceeds from steelmaking coal to about $4.9bn, a central step in the restructuring launched in 2024.

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The transaction ran into trouble after an ignition event at Moranbah North on 31 March 2025. Peabody told the US Securities and Exchange Commission it was reviewing all options, while Anglo described the incident as minor. After months of talks, Peabody said in August 2025 that it would walk away, arguing the fire amounted to a material change. Anglo disputed that view and began arbitration, which it said in May 2026 it was still pursuing.

Aftermath

The failed sale was a setback for a group trying to simplify its portfolio before merging with Teck. Anglo eventually reached a new agreement in May 2026 to sell the same Queensland mines to Dhilmar for up to $3.88bn, broadly matching Peabody's terms. For Johannesburg-listed Anglo, the episode shows how operational incidents can derail even signed deals in the coal sector.

Sources

• Miningmx: Anglo completes Aussie coal sales with $3.8bn Peabody deal, 25 Nov 2024
• Miningmx: Peabody reviews its options on $3.8bn Anglo coal deal after fire at Australian mine, 10 Apr 2025
• Moneyweb: Anglo suffers hit as Peabody pulls out of $3.8bn coal deal, 19 Aug 2025

Photo: A giant dragline bucket displayed as a monument in the coal-mining town of Moranbah, Queensland. Chris Olszewski, Wikimedia Commons, CC BY-SA 4.0.