Anglo American sells last of its steelmaking coal business

Anglo American will sell its remaining Australian steelmaking coal operations to Peabody Energy for up to $3.8 billion as it continues to restructure its operations to fend off takeover bids.
The FTSE 100 mining group has been overhauling its business to focus on its copper and iron ore assets after it was targeted with a £39 billion takeover offer from BHP earlier this year.
BHP’s abortive bid for Anglo American came as the industry races to secure mines producing the copper required for a global shift to renewable technologies such as wind farms and electric vehicles. Anglo American has become an attractive target for rivals as it owns copper mines in Peru and Chile, which can produce around 760,000 tonnes of copper annually.
Anglo American’s latest deal comes after it sold a separate stake in Australian steelmaking coal mines in Queensland for £850 million to the Brisbane billionaire Sam Chong. The group offloaded a 33 per cent holding in Jellinbah Group, the joint venture that owns a 70 per cent interest in the Jellinbah East and Lake Vermont mines.
Duncan Wanblad, chief executive of Anglo American, said on Monday: “The sale of our steelmaking coal business is 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.
“We are absolutely focused on delivering that strategy and unlocking the associated value as we streamline our cost structures and create a much simpler, more resilient and more agile business that will enable full market value recognition.”
Peabody, a US-based coalmining group, will pay cash of $2.05 billion up front for the assets, with a further cash consideration of $725 million to be paid in instalments after the deal closes. Peabody will also make further payments of up to $1 billion to Anglo American based on the earnings delivered by the coal operations and the reopening of the Grosvenor mine, which was shut down by a fire in July.
Anglo American’s shares were up by 1.7 per cent to £23.98 in morning trading on Monday.
BHP announced in April that it had sold Blackwater and Daunia, its coking coal businesses, for up to $4.1 billion, and Teck Resources, a Canadian mining group, has offloaded its steelmaking coal operations to Glencore for $6.9 billion.