Anglo American sells Australian steelmaking coal mines to Peabody Energy for US$3.775bn

The multinational miner has found a buyer for its Bowen Basin coal mines — but hundreds of millions of dollars are at risk of being burnt away.

Anglo's Moranbah North Mine file shot. Picture: Supplied by Anglo American

Peabody Energy has bought up Anglo American’s steelmaking coal assets in Australia for a potential total of US$3.8bn ($5.7bn) — but half a billion will depend on whether Grosvenor mine ever reopens.

The sale of Anglo’s Queensland coking coal mines has been described as “unlocking value” for Anglo American, according to chief executive Duncan Wanblad.

An ignition event at the Anglo American Grosvenor mine in Central Queensland shut down production since July. Picture: Supplied

“The sale of our steelmaking coal business is another important step towards delivering the strategy that we set out in May to create a world class copper, premium iron ore and crop nutrients business,” Mr Wanblad said.

“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.”

Anglo American chief executive Duncan Wanblad speaking at the World Mining Congress in Brisbane. Pictures supplied by Anglo American.

Jim Grech, chief executive, Peabody, said the company will “integrate” the assets, “teaming up with their highly skilled workforce, and aligning with our new mine joint venture partners to create long-term value”.

Isaac Regional Council Mayor Kelly Vea Vea said Mr Grech’s comments were a positive sign for communities that function because of long-term agreements associated with the mines purchased by Peabody.

“It’s encouraging to hear their global president emphasise a commitment to creating long-term value and strengthening their social license to operate,” Ms Vea Vea said.

“Over the last 24 years, Anglo American have built a portfolio of social commitments consisting of historical arrangements like water and housing supply to more recent support of childcare and medical services.

“It’s my Council’s expectation that Peabody steps up to the plate when it comes to upholding standards set in community by Anglo American.”

The portfolio includes an 88 per cent interest in Moranbah North; 70 per cent of Capcoal; 86.36 per cent of Roper Creek; 51 per cent of Dawson, Dawson South, Dawson South Exploration and Theodore South, and a 50 per cent interest in Moranbah South.

The Grosvenor mine was shut by a fierce fire in July, and US$450m of the sale price is contingent on its return.

Under the deal, Peabody would need to pay Anglo US$250m one month after it reopens, and US$200m on the second anniversary of the opening.

Anglo also recently sold its holdings in the Jellinbah mine for roughly US$1.1bn.