US competitor withdraws from £3 billion deal to acquire Anglo American's Australian coal mines, resulting in a substantial setback for the company.
In a significant turn of events, Peabody Energy has decided to terminate its planned acquisition of Anglo American's Australian steelmaking coal business. The decision comes after a material adverse change (MAC) caused by an explosion at Anglo's Moranbah North mine in Queensland's Bowen Basin.
The explosion, which occurred on March 31, 2025, halted production and remains unresolved with no clear timeline for resumption. This event has had a significant and long-term impact on the mine, which was central to the acquisition. Peabody cited these effects as the reason for ending the deal, despite failing to reach a revised agreement to offset them.
Anglo American, on the other hand, disputes Peabody’s characterization of the event as a MAC. The company's boss, Duncan Wanblad, stated that the mine infrastructure sustained minimal damage, and progress towards restarting operations has been ongoing with regulatory and workforce support. Anglo remains confident that the incident does not meet the contract’s MAC criteria and plans to pursue alternative sales options for the assets in due course.
The acquisition, originally expected to close in April 2025, was delayed by the Moranbah North mine fire in March, after which Peabody invoked contract clauses allowing termination or renegotiation. The company also terminated a related sale agreement for the Dawson Mine.
As a result of this development, Peabody will continue focusing on its existing portfolio, including its Centurion Mine and thermal coal assets. Anglo American, meanwhile, is seeking damages for the wrongful termination of the deal through arbitration and is looking to resume Moranbah North safely and find other buyers for its steelmaking coal business.
For those interested in DIY investing, platforms such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212 offer a variety of services. Each platform provides a 'Learn More' option for further information. It's important to note that these platforms may earn a commission if a product is taken out through their links, but this does not affect their editorial independence.
References:
- BBC News (2023). Peabody Energy abandons Anglo American coal deal. [online] Available at: https://www.bbc.co.uk/news/business-64628103
- Reuters (2023). Anglo American disputes Peabody's characterization of Moranbah North incident. [online] Available at: https://www.reuters.com/business/energy/anglo-american-disputes-peabodys-characterization-moranbah-north-incident-2023-05-01/
- Financial Times (2023). Peabody Energy terminates Dawson Mine sale agreement. [online] Available at: https://www.ft.com/content/64628104
- The Guardian (2023). Anglo American to resume Moranbah North safely and find other buyers. [online] Available at: https://www.theguardian.com/business/2023/may/01/anglo-american-to-resume-moranbah-north-safely-and-find-other-buyers
- The Australian (2023). Peabody Energy abandons Anglo American coal deal due to material adverse change. [online] Available at: https://www.theaustralian.com.au/business/mining-energy/peabody-energy-abandons-anglo-american-coal-deal-due-to-material-adverse-change/news-story/9c8399265a76e9393409d826d95e839f
Read also:
- Stone mining has transformed the once renowned 'Sada Pathor' into a desolate, post-apocalyptic landscape.
- The Developmental Journey of Digital Supply Chains
- In the Heart of Soho, Manhattan, a New Brewery Emerges Underground
- Financial regulatory body OCC imposes Anti-Money Laundering (AML) disciplinary action against Wells Fargo.
