The high-stakes drama in the global mining sector escalated Tuesday as Anglo American PLC announced it will pursue arbitration against Peabody Energy, following the U.S. mining giant’s abrupt withdrawal from a $3.78 billion deal for steel-making coal mines in Australia.
Anglo American, advised by Latham & Watkins LLP, had struck the agreement in November, selling off its four remaining metallurgical coal mines to Peabody, which was counseled by Jones Day. But the pact crumbled after Peabody claimed a “material adverse change” hit the assets.
Peabody Cites Safety Incident at Key Mine
The flashpoint came at Anglo’s Moranbah North mine in Queensland, where Peabody alleged an “ignition event” triggered safety concerns and undermined the value of the deal. “The exact cause of the event remains unknown, with no definitive timeline for resuming sustainable longwall production,” Peabody said, referring to the mechanized coal-extraction method central to the mine’s output.
Anglo, however, dismissed the claim, noting it disclosed a “minor ignition” on March 31 but insisted operations stabilized swiftly. The company added that data and camera footage showed no damage and that regulators are moving toward approving a safe restart.
