Bengaluru — Anglo American has initiated arbitration proceedings against Peabody Energy in response to the termination of a purchase agreement for the British mining giant’s steelmaking coal assets, the US-based company said on Friday.
In August, Peabody withdrew its $3.78bn bid for Anglo American’s Australian coking coal assets, after the two companies failed to agree on lowering the price following a mine fire.
Anglo was selling the mines in Queensland’s Bowen Basin, the world’s top steelmaking coal region, as part of its plan to divest or spin off noncore assets following bigger rival BHP’s failed takeover attempt last year.
Operations at the Moranbah North mine were halted in April after an underground fire caused by high gas levels. This prompted Peabody to invoke a clause allowing it to walk away or renegotiate if a major adverse event occurred between signing and completion.
“Peabody remains confident that a material adverse change occurred, entitling Peabody to terminate the purchase agreements,” the US coal miner said in a regulatory filing on Friday.
Anglo has so far returned $29m of the $75m deposit due to Peabody, the US-based coal miner said, adding that the company had demanded repayment of the remaining amount “without further delay”.
Shares of Peabody Energy were marginally up at $29.48 in premarket trading.
Reuters
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