Global miner Peabody Energy has terminated a multi-billion-dollar agreement to buy five steelmaking coal mines in Queensland’s Bowen Basin.
The $5.7 billion deal, announced in November, would have seen the US-based miner acquire the mines from Anglo American.Â
In a statement to investors late Tuesday Australian time, Peabody said it ended the deal after an ignition event at the Moranbah North mine in March.
Peabody said the event constituted a “material adverse change”, or MAC, which Anglo American disputed.
The entrance to Moranbah North Coal Mine. (ABC News: Liam O’Connell)
Peabody chief executive Jim Grech said in a statement the “two companies did not reach a revised agreement to cure the MAC that compensated Peabody for the material and long-term impacts” of the ignition event.
Mine owners Anglo American told markets it “firmly believed” the ignition on March 31 at Moranbah North did not constitute a MAC and said there was a “lack of damage” to the mine and equipment.
Anglo American chief executive officer Duncan Wanblad said the company would “shortly initiate an arbitration” to seek damages for what it termed “wrongful termination”.
‘Buying and selling communities’
Moranbah North was one of five Bowen Basin mines that was part of the deal — the other four being Capcoal, Dawson, Aquila and Grosvenor.
Anglo American provides housing, a shopping centre, childcare, and a medical centre for the purpose-built town of Middlemount that services surrounding mines.
Kelly Vea Vea says critical services like water to some communities are wrapped up in the transaction. (ABC News: Jenae Madden)
Issac mayor Kelly Vea Vea described the transaction of five mines and associated infrastructure as “huge.”
“This is basically the buying and selling of communities at this particular point,” she said.
She said the Isaac Regional Council had been working with Anglo American since the sale was announced last year to catalogue the broader social investments the company had made into communities including water infrastructure for the towns of Middlemount and Moranbah.
“It really has been an ongoing pursuit of ours to ensure that the buyer doesn’t leave communities worse off for the acquisition,” Cr Vea Vea said.
Anglo American’s Moranbah North coal mine is 200 kilometres south-west of Mackay. (Supplied)
The Mining and Energy Union said it would work with Anglo American to understand the situation in what Queensland president Mitch Hughes said was an uncertain time.
“Our focus is on getting clear information from Anglo American,” he said.
Anglo American told investors it had “unsolicited inbound interest” expressed to it in recent months, and it was confident it would conclude an “alternative sales process” in due course.