Anglo American has reportedly commenced arbitration proceedings against Peabody Energy following the cancellation of a purchase agreement for the former’s steelmaking coal assets.
According to a Reuters report, Peabody retracted its offer of almost $3.8bn for Anglo American’s Australian coking coal assets in August.
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This decision came after the two companies could not reach an agreement on reducing the price following a fire at the Moranbah North mine in Queensland.
Peabody had initially agreed to acquire the mines in Queensland’s Bowen Basin, considered to be a leading steelmaking coal region.
This move was part of Anglo’s strategy to sell or spin off non-core assets after a failed takeover attempt by iron ore company BHP last year.
In April, operations at the Moranbah North mine were suspended following an underground fire triggered by elevated gas levels.
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By GlobalDataThis led Peabody to activate a clause that permitted it to either withdraw from the agreement or renegotiate the terms if a significant adverse event transpired between the signing and the completion of the deal.
Anglo American returned $29m of the $75m deposit to Peabody, with the US-based coal miner demanding the remaining amount “without further delay”.
Last month, Anglo American, through its 50.1% owned subsidiary, Anglo American Sur, signed a definitive agreement with Codelco.
This agreement is aimed at executing a joint mine plan for their neighbouring copper operations, Los Bronces and Andina, in Chile.
