Peabody (NYSE:BTU) has terminated purchase agreements with Anglo American (LSE:AAL,OTCQX:AAUKF) following a material adverse change (MAC) to the latter’s steelmaking coal assets.
In a Tuesday (August 19) announcement, Peabody said that the decision follows an ignition event at Anglo American’s Moranbah North mine in Bowen Basin, Queensland, an instance that made headlines in April.
A report by ABC News Australia stated that the ignition at Moranbah led to an evacuation following “dangerous levels of carbon monoxide.”
“The two companies did not reach a revised agreement to cure the MAC that compensated Peabody for the material and long-term impacts of the MAC on the most significant mine in the planned acquisition,” said Peabody President and Chief Executive Officer Jim Grech.
Meanwhile, Anglo American CEO Duncan Wanblad said in a separate statement that they are confident in their belief that what happened at Moranbah “does not constitute a MAC” under the sale agreements with Peabody.
“Our view is supported by the lack of damage to the mine and equipment, as well as the substantial progress made with the regulator, our employees and the unions, and other stakeholders as part of the regulatory process towards a safe restart of the mine,” Wanblad furthered, adding that they have recently signed off the risk assessment that underpins the restart strategy.
Anglo American announced the sale of its steelmaking coal portfolio to Peabody in November 2024, amounting to US$3.78 billion.
The portfolio primarily consists of an 88 percent interest in the Moranbah North joint venture, a 70 percent interest in the Capcoal joint venture and an 86.36 percent interest in the Roper Creek joint venture.
“We are therefore very disappointed that Peabody has decided not to complete the transaction…We continue to reserve our rights under the definitive agreements, we are confident in our legal position and will shortly initiate an arbitration to seek damages for wrongful termination,” Anglo American said.
Peabody, on the other hand, said that it will continue to execute plans to create substantial value from its diversified global asset portfolio.
“(Our) portfolio is very well positioned, with growing exposure to seaborne metallurgical coal highlighted by our new 25-year premium hard coking coal Centurion Mine, a low-cost seaborne thermal coal platform, and a leading U.S. thermal coal position capitalizing on rising power generation demand,” said Grech.
“Moving forward, we intend to execute a four-pronged strategy for value creation.”
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
From Your Site Articles
Related Articles Around the Web
