The complete disposal is expected to generate up to $4.9bn gross cash proceeds. File photo.
Anglo American has picked Missouri-based Peabody Energy to take over its Australian steel-making coal mines for $3.8 billion, with the complete disposal of the portfolio geared to generate up to $4.9bn for the company.
The London and Johannesburg listed resource group is re-jigging its structure by disposing of some assets that include steel-making coal, platinum group metals (PGM) and diamonds among others. It has opted to focus more on strategic minerals such as copper and agro-minerals.
On Monday, Anglo-American said it had entered “into definitive agreements to sell the entirety of its steel-making coal” business.
The complete disposal is expected to generate up to $4.9bn gross cash proceeds.
This includes the disposal of Anglo American’s interest in Jellinbah for $1.1bn.
The company’s Australian steel-making coal operations for $3.77bn comprises an upfront cash consideration of $2.05bn, a deferred cash consideration of $725 million, the potential for up to $550m in a price-linked earnout and contingent cash consideration of $450m linked to the reopening of the Grosvenor mine.
“The sale of our steel-making 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 Wanbald, CEO for Anglo American.
The transaction is subject to a number of conditions, including customary competition and regulatory clearances, and pre-emption arrangements.
The upfront cash consideration is also subject to normal completion adjustments and completion is expected by the third quarter of 2025.
Peabody had 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 company said.
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