Anglo American has agreed to sell the remainder of its steelmaking coal operations for up to US$3.9billion (£3billion).
The group is in the process of a radical overhaul after fighting off takeover attempts, with plans to sell its nickel, coal, De Beers diamond and platinum businesses within two years.
It follows the mining giant’s decision to offload its holding in Jellinbah Group, which owns 70 per cent of the Jellinbah East and Lake Vermont coal mines in Australia, to Zashvin for £810million.
It now intends to sell the rest of the portfolio to Peabody Energy, a coal mining firm headquartered in St Louis, Missouri, for $2.05billion upfront and a deferred payment of $725million.
Among the assets Peabody will gain as part of the deal include Anglo’s majority stakes in the Moranbah North, Roper Creek and Capcoal joint ventures, as well as its 50 per cent interest in the Theodore South joint venture.
Peabody has further agreed to potentially pay $550million in quarterly price-linked ‘earnouts’ and another $450million if the Grosvenor mine in central Queensland reopens.
Production at Grosvenor has been suspended since late June following a fire caused by methane gas igniting. No workers were injured in the accident.
Deal: Anglo American has agreed to sell the remainder of its steelmaking coal operations for up to US$3.9billion to Peabody Energy
Jim Grech, president and chief executive of Peabody, said: ‘We’re pleased to acquire these world-class assets from Anglo American, a company that shares our strong values of safety, sustainability and social license to operate.
‘We look forward to integrating these assets, teaming up with their highly skilled workforce, and aligning with our new mine joint venture partners to create long-term value.’
Anglo announced plans in May for a radical overhaul in response to a blockbuster takeover attempt by rival mining giant BHP.
The FTSE 100 group received three offers from BHP, with the third and final proposal valued at a whopping £39billion.
Had it been accepted, the takeover would have been the largest ever in the mining sector’s history, but BHP walked away mainly because of concerns that the deal required Anglo to spin off its South African operations.
In addition to its steelmaking coal segment, Anglo intends to divest or demerge its Anglo American Platinum and De Beers diamond subsidiaries.
The company, the world’s largest platinum producer, said this would enable it to focus on producing copper, premium iron ore and crop nutrients.
Copper is considered a vital element in the green transition owing to its use in technologies like solar panels and wind turbines.
‘We are absolutely focused on delivering that strategy and unlocking the associated value as we streamline our cost structures and create a much simpler, more resilient and more agile business,’ said Duncan Wanblad, chief executive of Anglo American.
‘All the transactions to deliver our portfolio transformation are well in train,’ he added, with the demerger of Anglo American Platinum anticipated by the middle of next year.
Anglo American shares were 1.5 per cent higher at 2,393.5p on Monday morning, taking their gains since the year started to around 22 per cent.
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