A recent fire at Anglo American’s Moranbah North underground coal mine in Queensland may have thrown a spanner in the works of the group’s restructuring plans.
The incident took place on March 31, with mining operations at Moranbah being temporarily suspended after high levels of carbon monoxide were detected in the mine shaft.
Moranbah is the largest of the four Australian steelmaking coal mines which Anglo announced in November would be sold to US-based Peabody Energy as part of the group’s portfolio restructuring.
The deal was expected to close in mid-2025, but Peabody cast doubt on the agreement with a statement on Tuesday saying that it was reviewing “all options related to its acquisition of steelmaking coal assets from Anglo”.
“The company remains in conversation with Anglo American to better understand the impacts of the event. Peabody is preserving all rights and protections under its purchase agreements,” it said.
The purchase agreement comprised an upfront cash payment of $2.05bn plus other payments tied to the reopening of the Grosvenor mine, where a similar fire halted production in June.
On Thursday, Anglo said it “continues to work with Peabody towards satisfying the remaining customary conditions in those agreements that are required for completion of the transaction”.
According to Anglo, conditions in the mine normalised shortly after the “minor ignition” and remain stable, “with data and camera footage showing no evidence of damage”.
“Anglo is working alongside industry experts and the safety regulator, Resources Safety & Health Queensland, to expedite re-entry into the mine and the subsequent safe resumption of mining operations,” said the group.
The deal forms part of Anglo’s broader plan to sell off its steelmaking coal, platinum group metal (PGM) and diamond businesses to focus solely on copper, premium iron ore and crop nutrients.
Anglo CEO Duncan Wanblad proposed the portfolio transformation plan last year in an effort to keep shareholders on his side, after the group rebuffed a R700bn-plus buyout offer from mining behemoth BHP as unattractive and convoluted.
In January, Anglo completed the sale of its minority interest in the Jellinbah Group for A$1.6bn, with the remainder of its steelmaking coal portfolio to be sold to Peabody.
It has since signed a $500m sale agreement with MMG Singapore Resources for the nickel business, and the demerger of PGM subsidiary Anglo American Platinum (Amplats) is expected to conclude in June.
However, it is yet to find a suitable buyer for diamond business De Beers, with the rapid market growth of lab-grown diamonds putting downward pressure on the demand for natural diamonds in recent years.
Business Day reported that the declining demand for diamonds was a challenge that continued to threaten Anglo’s ability to get a good price from potential De Beers buyers.
In its latest annual results, Anglo reported an attributable loss of $3.1bn for the year to end-December after recognising $3.8bn in impairments, including a $3bn impairment on the diamond unit.
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