Peabody puts pressure on $6.3b pursuit
Peabody Energy has confirmed it still intends to acquire Anglo American’s Australian portfolio of steelmaking coal mines despite the recent pause in operations.
The company notified Anglo American of a material adverse change (MAC) that relates to a fire that occurred at the Moranbah North coal mine, located in Queensland, in March.
If the MAC is not resolved to Peabody’s satisfaction within the timeline under the acquisition agreements, the company may elect to terminate the multi-billion-dollar deal.
Anglo American confirmed that the small ignition was contained and that they continue to work with stakeholders to progress to recommencing operations.
Peabody president and chief executive Jim Grech comments on the acquisition.
“While we have remained on track to complete the steelmaking coal acquisition from Anglo, the issues at Moranbah North have created significant uncertainty around the transaction,” he said.
“A substantial share of acquisition value was associated with Moranbah North, yet there is no known timetable for resuming longwall production.”
Anglo American says that it does not believe the stoppage at the site constitutes a MAC in accordance with the definitive agreements with Peabody.
The company expects to continue working with Peabody in addressing concerns and satisfactorily meeting the conditions of the agreement.
The steelmaking coal portfolio consists primarily of:
- 88% interest in the Moranbah North joint venture
- 70% interest in the Capcoal joint venture
- 36% interest in the Roper Creek joint venture
- 51% interest in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the Theodore South joint venture
- 50% interest in the Moranbah South joint venture