Anglo to sell Australian coal mines to Peabody for up to $3.78 billion

(Reuters) -Anglo American on Monday agreed to sell its remaining Australian steelmaking coal mines to Peabody Energy for a cash consideration of up to $3.78 billion, in its first major disposal as part of a wider restructuring plan.

The mining giant is reshaping its business to mainly focus on copper and iron ore after fending off a $49 billion takeover bid from larger rival BHP Group in May, and the London-listed company hopes the disposal will satisfy shareholders and ward off unwanted suitors.

Peabody's agreed cash consideration comprises an upfront payment of $2.05 billion at completion, deferred cash consideration of $725 million, the potential for up to $550 million in a price-linked earnout, and contingent cash consideration of $450 million linked to the reopening of the Grosvenor mine, Anglo American said in a statement.

Peabody will buy Moranbah North, Grosvenor, Aquila, and Capcoal located in Australia's Bowen Basin. Anglo's Dawson mine will be onsold for $455 million to Indonesia's PT Bukit Makmur Mandiri Utama in a back-to-back transaction, Peabody said.

The agreement comes just days before a six-month freeze on another approach by BHP expires on Friday under UK takeover regulations, after Anglo rebuffed BHP three times.

The sale also comes after Anglo offloaded its minority stake in a joint venture that owns the Jellinbah East and Lake Vermont steelmaking coal mines in Australia, for $1.1 billion.

Anglo's plan to restructure also includes shedding underperforming platinum, nickel and diamonds assets to focus on copper, a metal key for the clean energy transition and the rapid expansion of artificial intelligence.

After coal, Anglo is expected to spin out its Anglo American Platinum unit in South Africa by mid-2025.

Anglo American also said it expects De Beers to follow as the group works towards separation of that business.

(Reporting by Melanie Burton in Melbourne and Aby Jose Koilparambil in Bengaluru; Editing by Sonali Paul, Rashmi Aich and Louise Heavens)