Peabody Energy Terminates Agreements with Anglo American

Peabody Energy Corporation has terminated its asset purchase agreements with Anglo American, citing unsatisfactory conditions. The company owns coal mining operations in the US and Australia, including Middlemount Coal Pty Ltd. It markets and brokers coal, trades coal and freight-related contracts, and operates in segments such as Seaborne Thermal Mining, Seaborne Metallurgical Mining, and Powder River Basin Mining.

Peabody Energy Corporation (NYSE: BTU) has terminated its asset purchase agreements with Anglo American Plc, citing unsatisfactory conditions related to Anglo's steelmaking coal assets. The decision comes nearly five months after an ignition event occurred at Anglo's Moranbah North Mine in Australia, which has led to an indefinite suspension of longwall production [1].

Peabody's President and Chief Executive Officer, Jim Grech, stated that the company could not reach a revised agreement to cure the material adverse change (MAC) that would have compensated Peabody for the long-term impacts of the incident. The original acquisition was scheduled to close in April 2025 but has now been terminated [1].

The Moranbah North Mine was targeted to produce 5.3 million tons of saleable production in 2025, but there is no timetable for the resumption of longwall production at forecasted volumes and costs. Anglo estimates $45 million per month of holding costs at Moranbah North [1].

Peabody has also terminated the agreement for the related sale of the Dawson Mine to PT Bukit Makmur Mandiri Utama. In response to these developments, Peabody has outlined a four-pronged strategy for value creation, focusing on safe and productive operations, returning 65-100% of available free cash flow to shareholders, leveraging its extensive asset portfolio for organic growth, and maintaining a resilient balance sheet [1].

The termination of the deal is a significant setback for Anglo, which had planned to sell its coal assets as part of a broader restructuring effort. The deal was seen as a major early win for Anglo, potentially bringing in cash and demonstrating progress to its investors. However, the collapse of the deal would be a major blow to Anglo, which has already spun off its platinum business and is looking for a buyer for its struggling De Beers diamond division [3].

The dispute between Peabody and Anglo over the impact of the Moranbah fire and the lack of a credible timetable for the resumption of operations led to the termination of the acquisition. Both companies are confident in their legal positions, and a long arbitration process could be an overhang on shares of both companies [3].

Peabody Energy is a leading coal producer, providing essential products for the production of reliable energy and steel. The company's operations include mines in the United States and Australia, with interests in Middlemount Coal Pty Ltd and the Wards Well tenement [2]. Despite the termination of the Anglo acquisition, Peabody remains committed to its strategy of creating substantial value from its diversified global asset portfolio [1].

References:
[1] https://www.prnewswire.com/news-releases/peabody-terminates-planned-acquisition-with-anglo-american-302533365.html
[2] https://www.marketscreener.com/news/peabody-energy-terminates-asset-purchase-agreements-with-anglo-american-ce7c51ddd88ef122
[3] https://www.bloomberg.com/news/articles/2025-08-19/peabody-to-pull-out-of-3-8-billion-deal-for-anglo-s-coal-assets