Anglo American is exiting the coal sector with an asset sale worth $3.9 billion

Anglo American has agreed to sell the remainder of its coal business for up to $3.9 billion.

The group is in the midst of a radical reorganization after fending off takeover attempts, with plans to sell its nickel, coal, De Beers diamond and platinum businesses within two years.

It follows the mining giant’s decision to transfer its stake in the Jellinbah Group, which owns 70 percent of Australia’s Jellinbah East and Lake Vermont coal mines, to Zashvin for £810 million.

It now plans to sell the remainder of the portfolio to Peabody Energy, a coal mining company headquartered in St. Louis, Missouri, for $2.05 billion upfront and a deferred payment of $725 million.

Among the assets Peabody will acquire as part of the deal are Anglo’s majority stakes in the Moranbah North, Roper Creek and Capcoal joint ventures, as well as its 50 percent stake in the Theodore South joint venture.

Peabody has further agreed to pay a potential $550 million in price-related earnouts per quarter and a further $450 million if the Grosvenor mine in central Queensland reopens.

Production at Grosvenor has been suspended since late June following a fire caused by ignition of methane gas. No employees were injured in the accident.

Jim Grech, president and CEO of Peabody, said, “We are pleased to acquire these world-class assets from Anglo American, a company that shares our strong values ​​of safety, sustainability and social license to operate.

“We look forward to integrating these assets, working with their highly skilled workforce and working with our new joint venture partners at the mines to create long-term value.”

Anglo announced plans for a radical overhaul in May in response to a successful takeover attempt by rival mining giant BHP.

The FTSE 100 group received three offers from BHP, with the third and final proposal valued at a whopping £39 billion.

Had this takeover been accepted, the takeover would have been the largest ever in the history of the mining sector, but BHP walked away, mainly due to concerns that the deal required Anglo to spin off its South African operations.

In addition to the coal segment for steel production, Anglo plans to divest or spin off its diamond subsidiaries Anglo American Platinum and De Beers.

The company, the world’s largest platinum producer, said this would allow it to focus on producing copper, premium iron ore and crop nutrients.

Copper is considered an essential element in the green transition due to its use in technologies such as solar panels and wind turbines.

“We are absolutely focused on delivering on that strategy and unlocking the associated value while streamlining our cost structures and creating a much simpler, more resilient and flexible business,” said Duncan Wanblad, CEO of Anglo American.

“All transactions to achieve our portfolio transformation are well underway,” he added, with the demerger of Anglo American Platinum expected by the middle of next year.

Anglo-American stocks were 1.5 percent higher at 2,393.5p on Monday morning, taking their gain since the start of the year to around 22 percent.