US coal group Peabody Energy is “reviewing all options” relating to its purchase of Anglo American’s Australian metallurgical coal mines which it agreed in November to buy for up to $3.8bn in cash.
Peabody said in a filing to the US Securities and Exchange Commission (SEC) that was taking this action “following an ignition event at Anglo American’s Moranbah North mine.”
Peabody added that, “it remains in conversation with Anglo American to better understand the impacts of the event. Peabody is preserving all rights and protections under the purchase agreements.”
Replying to the Peabody statement Anglo American said it believed the incident to be a “minor ignition in the underground area of the mine on March 31. Conditions in the mine normalised shortly afterwards and they remain stable with data and camera footage showing no evidence of damage.”
Anglo commented it is “working along with industry experts and the safety regulator – Resources Safety and Health Queensland – to expedite re-entry into the mine and the subsequent safe resumption of mining operations.”
Anglo added it “continues to work with Peabody towards satisfying the remaining customary conditions in those agreements that are required for completion of the transaction.”
In June last year Anglo suspended production at its Grosvenor steelmaking coal mine in Queensland following an underground gas ignition incident. Grosvenor is situated close to Moranbah North and uses Moranbah North’s coal processing infrastructure.
Announcing the sale to Peabody in November, Anglo CEO Duncan Wanblad said he expected the deal to be completed by the third quarter of 2025. He added that, “in steelmaking coal, through a combination of the 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.”
As part of the deal Peabody paid an up-front $75m deposit on signing which Anglo American is entitled to keep “if the sale is terminated in certain limited circumstances.”
