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Peabody Energy Abandons $3.8bn Deal with Anglo American Following Mine Incident
August 20, 2025
In a blow to Anglo American Plc’s restructuring plans, the company’s $3.8bn deal to sell its steelmaking coal business to Peabody Energy Corp. was scrapped. The breakdown occurred after a fire at Anglo’s Moranbah North mine in Australia, an asset that Peabody valued at about half the deal’s worth. Peabody claimed that the fire constituted a “material adverse change” (MAC), giving it the right to terminate the agreement. Anglo American disagreed and sought arbitration to seek damages, noting that it was a wrongful termination.
The deal was a key part of Anglo’s plan to simplify its business and focus on copper and iron ore. Besides, the deal failure is also said to create a new challenge as Anglo tried to fend-off a takeover bid from BHP Group. Peabody will also look to recover a $75mn deposit. While Anglo American is confident it can find a new buyer, the resale process will likely take time and may face a less favourable market with lower coal prices. The dispute is expected to be a slow legal process, sources said.
Anglo American’s 5.625% 2030s were trading stable at 104.2, yielding 4.5%.
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