Peabody scraps $3.8bn Anglo American coal deal after mine fire, arbitration follows

Peabody Energy told investors on 19 August 2025 that it was terminating its agreement to acquire Anglo American's remaining steelmaking coal portfolio, a transaction that had been valued at up to $3.8bn when first agreed in November 2024, as part of a wider package Anglo said could generate as much as $4.9bn in total proceeds from exiting coal. Peabody cited an ignition event at the Moranbah North mine in Queensland in March 2025 as a material adverse change that entitled it to walk away from the purchase agreements.

Anglo disputes the exit

Anglo American rejected Peabody's justification, and on 23 September 2025 various Anglo subsidiaries launched International Chamber of Commerce arbitration proceedings in London against Peabody and its affiliates. Anglo's complaint argues that Peabody wrongfully terminated the purchase agreements, seeks a declaration that the Moranbah North ignition event did not constitute a material adverse change, and claims damages, costs and interest in an amount not yet specified.

A late snag in a long breakup

The coal sale was meant to be one of the final steps in Anglo American's multi-year portfolio overhaul, alongside the Valterra Platinum demerger, the pending De Beers disposal and the Teck merger, all aimed at leaving the group focused on copper and iron ore. Under the original terms, Peabody's cash consideration comprised $2.05bn upfront, $725m deferred, up to $550m in a price-linked earn-out, and $450m of contingent payments, a structure that reflected the deal's complexity even before the mine fire intervened.

What happens next

With the sale terminated and arbitration under way, Anglo retains ownership of the disputed coal assets for now, an outcome it did not want given its stated strategy of exiting coal entirely. The dispute adds a further complication to a restructuring programme that has otherwise proceeded largely on schedule, and the arbitration's outcome will determine both the ultimate fate of the coal assets and whether Anglo can recover damages for a deal that collapsed at what should have been its final stage.

The dispute is likely to take months, if not longer, to resolve through arbitration, leaving Anglo American in the unusual position of continuing to operate and report on coal assets it had already announced plans to exit, complicating the narrative of a clean, completed portfolio transformation the company had been building toward.

Sources

• Mining Weekly: Peabody scraps Anglo American coal deal, faces arbitration threat, 19 Aug 2025
• ABC News: $5.7 billion, five coal mine deal termination sparks arbitration, 20 Aug 2025
• Anglo American: Anglo American update on sale of steelmaking coal business to Peabody, 05 May 2025