Peabody overnight: Definitive timeline or we might be out
Small fire at Moranbah North could end up burning the $6.4B Anglo sale agreement
Peabody has threatened to terminate its $6.4 billion deal to buy Anglo American’s Bowen basin coal mines.
In an overnight statement, the company classified the Moranbah North fire and subsequent evacuation and closure as a material event that changed the sale agreement between the companies.
“Peabody has notified Anglo American of a Material Adverse Change (MAC) impacting Peabody’s planned acquisition of steelmaking coal assets from Anglo,” Peabody President and Chief Executive Officer Jim Grech said overnight.
“The MAC relates to issues involving the Moranbah North Mine, which remains inactive following what was described as a gas ignition event on March 31, 2025.
“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.
“A substantial share of the acquisition value was associated with Moranbah North, yet there is no known timetable for resuming longwall production.
“If the MAC is not resolved to Peabody’s satisfaction in the limited timeframe specified under the companies’ acquisition agreements, Peabody may elect to terminate the agreements.”
In response, Anglo American released a statement saying they contested the classification of the event as a Material Adverse Change.
“Initial re-entry to Moranbah North mine was completed on April 19, and Anglo American is continuing to work closely with the safety regulator, Resources Safety & Health Queensland, industry experts and other key stakeholders as we progress towards a structured restart to longwall production once it is determined that it is safe to do so,” they said.
“As a result of the progress made to date towards a safe restart and the information available, Anglo American does not believe that the stoppage at Moranbah North constitutes a Material Adverse Change in accordance with the definitive agreements with Peabody.
“Anglo American expects to continue working with Peabody towards addressing its concerns and satisfying the remaining customary conditions in those agreements that are required for completion of the Transaction.”
US-based coal miner Peabody previously announced it was reviewing all options for its planned purchase of Anglo American’s Australian coal business.
The transaction agreement between the two companies provides an upfront cash payment of US$1.695 billion and $625 million of deferred cash payments over a four-year period. On top of this, Peabody will pay $450 million if it successfully restarts the Grosvenor mine and up to $550 million in royalties over five years, depending on where coal prices go.
The deal was subject to the usual conditions for a sale of this magnitude and, not surprisingly, included conditions that required the mines to be in the same condition on the settlement date as when the deal was agreed.