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.  

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. 

This 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.