Peabody and Anglo American enter arbitration

Anglo American has launched arbitration proceedings against Peabody Energy over the failed $5.7b sale of its Queensland steelmaking coal mines.

Peabody pulled out of the sale by invoking a material adverse change (MAC) in August following a fire at Anglo American’s Moranbah North mine.

Anglo American believed the event did not constitute a MAC under the definitive agreements due to the lack of damage to the mine or equipment and the clear progress being made within a rigorous and structured regulatory process towards restarting the mine.

The buyer says it remains confident that a MAC occurred, entitling Peabody to terminate the purchase agreements.

Peabody has now demanded the remainder of its $114m deposit to be returned without further delay. Anglo American has already returned $44m (US$29m) of the $114m (US$75m) deposit due to Peabody.

Prior to the March 31 fire event, the acquisition had been scheduled to close in April. The mine was previously targeted to produce 5.3mt of saleable production in 2025.