Peabody Energy has reaffirmed its intent to pursue the acquisition of Anglo American’s ‘world-class’ steelmaking coal portfolio.
The company formally notified Anglo of a material adverse change (MAC) related to the Moranbah North mine in Queensland, which was impacted by a recent fire.
This notification is in relation to an incident taking place on March 31 that saw high levels of carbon monoxide detected in Moranbah North. An Anglo representative confirmed shortly afterwards that no injuries were recorded.
Despite the question of when the restart will begin, both companies remain committed to progressing the $US3.775 billion ($6.3 billion) deal.
“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,” Peabody president and chief executive officer Jim Grech said.
“A substantial share of the acquisition value was associated with Moranbah North, yet there is no known timetable for resuming longwall production.”
Despite these questions, Grech described Anglo’s steelmaking coal portfolio as “world-class”.
“We look forward to integrating these assets, teaming up with their highly skilled workforce, and aligning with our new mine joint venture partners to create long-term value,” Grech said.
Anglo American believes a restart is close, as the company completed an initial re-entry to Moranbah North on April 19, as it continues to work closely with regulators and industry experts.
“Anglo American does not believe that the stoppage at Moranbah North constitutes a material adverse change in accordance with the definitive agreements with Peabody,” the company said.
“We expect to continue working with Peabody towards addressing its concerns and satisfying the remaining customary conditions in those agreements.”
Anglo American is divesting its assets as its strategy aims to focus on copper, premium iron ore, and crop nutrients.