Mining giant Anglo American sells steelmaking coal for $3.8 billion

Global mining giant Anglo American has reached a definitive agreement to sell its entire steelmaking coal business to Peabody Energy Corporation for a total cash consideration of up to $3.8 billion, which, together with the previously announced sale of Anglo American's stake in Australian coal miner Jellinbah for approximately $1.1 billion, is expected to generate total cash proceeds of up to $4.9 billion.

The steelmaking coal portfolio consists primarily of interests in Australian mines, and the transaction structure includes $2.05 billion in upfront cash, $725 million in deferred payments, up to $550 million in potential price-linked proceeds, and $450 million in contingent payments related to the reopening of the Grosvenor mine.
Anglo American CEO Duncan Wanblad highlighted the strategic significance of the move, saying: "The sale of the Steelmaking Coal business is another important step in our strategy to build world-class copper, premium iron ore and crop nutrients businesses. By focusing on these core areas, we aim to provide a highly differentiated investment proposition, backed by strong cash generation and broad capabilities."
Anglo American is actively pursuing cost savings, targeting $1 billion in costs and an additional $800 million in pre-tax recurring cost benefits.

Peabody President and CEO Jim Grech expressed great enthusiasm for the acquisition, saying: "We are pleased to acquire these world-class assets, and Anglo American shares our commitment to safety, sustainability and social responsibility. We look forward to integrating these assets, leveraging our skilled workforce and working with our joint venture partners to create long-term value."

The transaction is subject to customary regulatory approvals and other conditions and is expected to close in the third quarter of 2025. Peabody has agreed to pay a $75 million deposit at signing, which Anglo American can retain under certain circumstances.

This strategic divestment is an important step for Anglo American to restructure its portfolio and focus on its core strengths. The transaction with Peabody is expected to generate significant cash proceeds, strengthen the Company’s balance sheet and provide financial flexibility for future growth initiatives.