ANGLO American is to sell the remainder of its 15 to 17 million tons a year Australian metallurgical coal mine production in a $3.8bn cash deal with US group, Peabody Energy, unveiled on Monday.
“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,” said Duncan Wanblad, CEO of Anglo American.
This takes total proceeds from the sale of Anglo American’s metallurgical coal assets in Australia to $4.9bn after the company on November 4 announced the sale of its 33.3% stake in Jellinbah Group – comprising the Jellinbah East and Lake Vermont mines – for $1.06bn to Zashvin Ltd, also 33.3% shareholder in Jellinbah Group.
Shares in Anglo American gained 2.6% in early Johannesburg trade taking year-to-date gains to just over 20%.
The deal with Peabody comprises an upfront cash portion of $2.05bn and deferred payment of $725m. The balance of the consideration comprises a $550m price-linked earnout and a contingent cash consideration of $450m which is linked to the reopening of Grosvenor coal mine.
Grosvenor was closed in July following an underground coal gas explosion. The damage caused by the fire was “not as bad as it might have been”, Wanblad said in September.
“In steelmaking coal, through a combination of today’s announced transaction and our previously announced agreement to sell our interest in Jellinbah, we stand to unlock up to $4.9bn of value, reflecting the high quality of the assets and adding to our balance sheet resilience,” said Wanblad.
Anglo’s steelmaking portfolio consists primarily of an 88% interest in the Moranbah North joint venture; a 70% interest in the Capcoal joint venture; an 86.36% interest in the Roper Creek joint venture; a 51.0% interest in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the Theodore South joint venture; and a 50% interest in the Moranbah South joint venture.
Wanblad added that there was “strong interest” in the firm’s nickel assets with “the sale process well progressed”. The sale of Anglo’s 85% stake in De Beers was expected to follow, he added.
Anglo is also unbundling its controllling stake in Anglo American Platinum (Amplats) which will include a secondary listing of the unit in London.
These asset sales are in terms of a wide-reaching restructuring of the company announced in May as Anglo sought to fight off a possible takeover by BHP.
The upfront cash consideration, which is subject to normal completion adjustments and completion, is expected by the third quarter of 2025.
Peabody has agreed to pay a $75m deposit on signing which Anglo American is entitled to retain if the sale is terminated in certain limited circumstances, the group said.
