Anglo American PLC (LSE:AAL) has struck a deal to offload its steelmaking coal business to Peabody Energy Corporation (NYSE:BTU) for up to US$3.8 billion cash.
The Australian mines are being sold to US coal specialist for an up-front US$2.05 billion on completion of the deal, with up to another US$550 million in quarterly 'earn-out' payments based on the price of coal, and another US$450 million to be paid once the Grosvenor mine is reopened and begins selling coal.
On top of the separate and previously announced $1.1 billion sale of its stake in the Jellinbah joint venture at the start of this month, the FTSE 100-listed miner hailed a total of $4.9 billion cash proceeds from Australian coal asset sales as it begins the transformation plans triggered by the rejection of the BHP takeover approach earlier this year.
If competition and regulatory clearances are received, completion is expected by the third quarter of next year.
Chief executive Duncan Wanblad said the deal with Peabody was "another important step towards delivering the strategy that we set out in May to create a world class copper, premium iron ore and crop nutrients business".
Looking elsewhere, he said the demerger of Anglo American Platinum is expected by mid-2025 and there has been "strong interest" from potential buyers for Anglo's nickel business, with the sale process "well progressed".
Selling De Beers will come next after that, he said.