Anglo American sells steelmaking coal portfolio

Anglo American has agreed to sell its portfolio of Australian steelmaking coal mines that it operates in Australia to Peabody Energy for a cash consideration of up to $5.8b (US$3.775b).

This will generate up to $7.5b (US$4.9b) in aggregate gross cash proceeds, including the already announced sale of Anglo American’s interest in Jellinbah for approximately $1.7b (US$1.1b).

Anglo American chief executive Duncan Wanblad says the sale of the company’s steelmaking coal business is another important step towards delivering the strategy that it set out in May to create a world class copper, premium iron ore and crop nutrients business.

“Through focus, asset quality and outstanding growth options, Anglo American will offer a highly differentiated investment proposition supported by strong cash generation and the capabilities and longstanding relationship networks that can deliver our full potential,” he said.

“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 that will enable full market value recognition.

“All the transactions to deliver our portfolio transformation are well in train — the demerger of Anglo American Platinum is expected by mid-2025 and we have seen strong interest in our nickel business with the sale process well progressed.

“We expect De Beers to follow, recognising its unmatched industry and brand position and good progress in working with stakeholders to position the business for long term success as we work toward separation for value.

“We are well progressed with the delivery of $1b of cost savings and have detailed plans in place to deliver at least an additional [$1.2b (US$800m)] in pre-tax recurring cost benefits on a run-rate basis from the end of 2025 as we progress the portfolio transformation.

“In steelmaking coal, through a combination of today’s announced transaction and our previously announced agreement to sell our interest in Jellinbah, we stand to unlock up to [$7.5b (US$4.9b)] of value, reflecting the high quality of the assets and adding to our balance sheet resilience.

“Peabody is a long-established and respected operator and we will work together and with our workforce, local communities, government, customers and partners to ensure a successful transition.”

Peabody president and chief executive Jim Grech says the company is pleased to acquire these world-class assets from Anglo American.

“We look forward to integrating these assets, teaming up with [Anglo American’s] highly skilled workforce and aligning with our new mine joint venture partners to create long-term value,” he said.

The steelmaking coal portfolio consists primarily of an 88% interest in the Moranbah North joint venture; a 70% interest in the Capcoal joint venture; an 86.36% interest in the Roper Creek joint venture; a 51% interest in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the Theodore South joint venture and a 50% interest in the Moranbah South joint venture.

Completion of the transaction is expected by the Q3 CY25.