US coal miner Peabody Energy has paused efforts to secure $500m in private debt to refinance part of a $2.1bn bridge loan for the proposed takeover of Anglo American’s steelmaking coal assets, reported Bloomberg, citing sources familiar with the matter.

The decision followed a review of the proposed takeover, valued at up to $3.78bn, due to a fire at Anglo American's Moranbah North Mine, which is included in the deal.

This incident marks the second disruption since Anglo American began selling its coal portfolio. Both companies are still in negotiations, as stated in Peabody's recent announcement.

Peabody is also considering an $800m bond to refinance the remaining loan.

The bridge loan lenders included Jefferies Group, Deutsche Bank, KKR Capital Markets and KKR Corporate Lending.

Peabody had announced plans to refinance the bridge loan before the acquisition, which is expected to be completed in the first half of this year.

The shift towards private credit comes as traditional banks withdraw from financing projects with potential environmental, social and governance risks, according to the report.

In a separate development, Peabody has entered into a contract with Associated Electric Cooperative to supply seven to eight million tonnes of coal annually for at least seven years from its North Antelope Rochelle Mine in Wyoming's Powder River Basin.

The coal will be utilised by Associated Electric's New Madrid Power Plant and Thomas Hill Energy Centre in Missouri.

Peabody president and CEO Jim Grech said: "This substantial agreement demonstrates the ongoing importance of Peabody's coal in providing reliable, affordable baseload electricity for years to come.

"American demand for electricity is growing for the first time in many years given increased power needs from data centres and artificial intelligence. We are pleased to extend our long-term relationship with Associated and look forward to supplying their fuel needs well into the future."