Peabody Energy (NYSE:BTU) climbed 9% after the coal company announced it is walking away from its planned purchase of Anglo American Plc’s (LSE:AAL) steelmaking coal operations, citing a material adverse change.
The move follows nearly five months of uncertainty tied to a March 31 ignition incident at Anglo’s Moranbah North Mine, where there is still no clear timeline for restoring steady longwall output. Peabody said efforts to renegotiate terms that would address the “material and long-term impacts” tied to Moranbah — described as the centerpiece of the proposed deal — ultimately failed.
“Peabody’s portfolio is very well positioned, with growing exposure to seaborne metallurgical coal highlighted by our new 25-year premium hard coking coal Centurion Mine, a low-cost seaborne thermal coal platform, and a leading U.S. thermal coal position capitalizing on rising power generation demand,” said Jim Grech, Peabody’s President and CEO.
The transaction had been slated for completion in April 2025 before the mine disruption. Anglo American is reportedly incurring roughly $45 million per month in holding costs at Moranbah North, which had been projected to deliver 5.3 million tons of output this year.
In addition, Peabody said it has withdrawn from the related sale of its Dawson Mine to PT Bukit Makmur Mandiri Utama. The company emphasized it remains focused on its four-pillar strategy: maintaining safe operations, returning 65–100% of available free cash flow to shareholders, pursuing organic growth opportunities, and protecting balance sheet strength.
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