Anglo American will sell its whole steelmaking coal business to Peabody Energy for up to $US3.775 billion ($5.8 billion), as part of its plan to focus on copper assets in South America and iron ore assets in South Africa and Brazil.
The up to $US3.775 billion ($5.8 billion) deal comprises:
- a $US2.05 billion ($3.1 billion) upfront cash consideration at the transaction’s completion
- a $US725 million ($1.1 billion) deferred cash consideration
- a potential price-linked earn-out worth up to $US450 million ($692 million)
- a $US450 million ($692 million) contingent cash consideration related to the reopening of the Grosvenor coal mine in Queensland.
Peabody has also agreed to pay a $US75 million ($115 million) deposit on signing, which Anglo is entitled to retain if the sale is terminated in limited circumstances.
The sale of Anglo’s entire steelmaking coal business, which includes the already announced sale of the company’s 33.3 per cent stake in Jellinbah Group to Zashvin for approximately $US1.1 billion ($1.7 billion), is expected to generate $US4.9 billion ($7.5 billion).
“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,” Anglo chief executive officer (CEO) Duncan Wanblad said.
“Through focus, asset quality and outstanding growth options, Anglo American will offer a highly differentiated investment proposition supported by strong cash generation and the capabilities and longstanding relationship networks that can deliver our full potential.
“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.”
Anglo’s steelmaking coal portfolio, which is situated in prime Queensland coal territory, consists of:
- an 88 per cent interest in the Moranbah North joint venture
- a 70 per cent interest in the Capcoal joint venture
- an 86.36 per cent interest in the Roper Creek joint venture
- a 51 per cent interest in the Dawson Complex
- a 50 per cent interest in the Moranbah South joint venture.
Peabody president and CEO Jim Grech described Anglo’s steelmaking coal portfolio, as “world-class”.
“We look forward to integrating these assets, teaming up with their highly skilled workforce, and aligning with our new mine joint venture partners to create long-term value,” Grech said.
The transaction is subject to several conditions and expected to be completed by the third quarter of 2025.
Delta Dunia Group, through its indirect subsidiary PT Bukit Makmur Internasional (BUMA International), has entered into a binding agreement with Peabody to acquire a 51 per cent interest in the Dawson Complex, which comprises the Dawson, Dawson South, Dawson South Exploration, and Theodore South joint ventures.
The remaining 49 per cent stake in the Dawson Complex is held by Mitsui Resources.
BUMA will fund Peabody’s acquisition of the Dawson joint venture and Peabody will transfer the Dawson Complex to BUMA International once its transaction with Anglo is completed.
The acquisition will be funded by Delta Dunia Group’s cash reserves, a syndicated bank facility, and a guarantee facility for rehabilitation obligations.
The acquisition comprises $US355 million ($545 million) in upfront cash proceeds and $US100 million ($153 million) of cash payable over the period up to the fourth anniversary of the transaction being completed.
BUMA’s acquisition of the Dawson joint venture will be executed through a newly established Australian entity, with a targeted completion in 2025.
“The acquisition of Dawson reinforces our position in the global metallurgical coal market and builds on our recent acquisition of Atlantic Carbon Group Inc,” Delta Dunia Group president director Ronald Sutardja said.
“This move further delivers on our multi-year strategic plan to diversify into a major coal services provider and producer, leveraging the Group’s industry-leading capabilities.
“The Dawson Complex will support our ambition to drive long-term growth and strengthen our role as a major industry player.”
The Dawson Complex has a production capacity of greater than eight million tonnes per annum and a resource life to support a mine life of over 50 years. The asset is also supported by established infrastructure and well-known coal products, which have strong demand in Asia.
Acquiring a stake in the Dawson Complex is set to position BUMA as a leading metallurgical coal producer.
“With Dawson’s premium, long-life reserves and resources and strong customer base, we are well-positioned to create long term value for our stakeholders,” Sutardja said.
“Excited by the significant growth potential Dawson adds to our portfolio, we are committed to leveraging our operational expertise and dedication to excellence to fully realise its potential.”
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