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Anglo American initiates arbitration against Peabody for failed deal

Anglo American, a U.S. based company, announced on Friday that it had initiated arbitration proceedings against Peabody Energy as a result of the termination by the British mining giant of an agreement to purchase its steelmaking coal assets.

Peabody, August

Withdrawal

After two companies were unable to agree on a lower price after a mine explosion, Anglo American made a $3.78 billion offer for Anglo American’s Australian coal assets.

Peabody has agreed to buy the mines located in Queensland's Bowen Basin. This is the top steelmaking coal producing region of the world. Anglo had been looking to sell off or spin-off non-core assets after BHP failed to takeover the company last year.

In April, the operations at Moranbah North were stopped after a fire underground caused by high levels of gas. Peabody invoked a clause that allowed it to walk out or renegotiate the contract if there was a major event between signing and completion.

Anglo returned $29 Million of the $75 Million deposit due to Peabody. The U.S. coal miner added that it has demanded the repayment of the remainder "without further delay".

(source: Reuters)