Wrap Text
Anglo American to generate up to US$4.9 billion of total cash proceeds from sale of steelmaking coal business
News Release
Anglo American plc (the "Company")
Registered office: 17 Charterhouse Street, London EC1N 6RA
Registered number: 3564138 (incorporated in England and Wales)
Legal Entity Identifier: 549300S9XF92D1X8ME43
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM
25 November 2024
Anglo American to generate up to US$4.9 billion of total cash proceeds from sale of steelmaking coal business:
agrees sale of remaining steelmaking coal portfolio to Peabody Energy for up to US$3.8 billion
Anglo American announces that it has now entered into definitive agreements to sell the entirety of its
steelmaking coal business, to generate up to US$4.9 billion in aggregate gross cash proceeds(1), including the
already announced sale of Anglo American's interest in Jellinbah for approximately US$1.1 billion.
Announced today, Anglo American has agreed to sell its portfolio of steelmaking coal mines that it operates in
Australia ("Steelmaking Coal Portfolio") to Peabody Energy ("Peabody") for a cash consideration of up to
US$3.775 billion ("the Transaction").
Peabody's agreed cash consideration of up to US$3.775 billion comprises an upfront cash consideration of
US$2.05 billion at completion; deferred cash consideration(2) of US$725 million; the potential for up to US$550
million in a price-linked earnout(3); and contingent cash consideration4 of US$450 million linked to the reopening
of the Grosvenor mine.
Duncan Wanblad, Chief Executive of Anglo American, said "The sale of our steelmaking coal business is another
important step towards delivering the strategy that we set out in May to create a world class copper, premium
iron ore and crop nutrients business. Through focus, asset quality and outstanding growth options, Anglo
American will offer a highly differentiated investment proposition supported by strong cash generation and the
capabilities and longstanding relationship networks that can deliver our full potential. We are absolutely focused
on delivering that strategy and unlocking the associated value as we streamline our cost structures and create a
much simpler, more resilient and more agile business that will enable full market value recognition.
"All the transactions to deliver our portfolio transformation are well in train – the demerger of Anglo American
Platinum is expected by mid-2025 and we have seen strong interest in our nickel business with the sale process
well progressed. We expect De Beers to follow, recognising its unmatched industry and brand position and good
progress in working with stakeholders to position the business for long term success as we work toward
separation for value. We are well progressed with the delivery of $1 billion of cost savings and have detailed
plans in place to deliver at least an additional US$800 million in pre-tax recurring cost benefits on a run-rate basis
from the end of 2025 as we progress the portfolio transformation.
"In steelmaking coal, through a combination of today's announced Transaction and our previously announced
agreement to sell our interest in Jellinbah, we stand to unlock up to US$4.9 billion of value, reflecting the high
quality of the assets and adding to our balance sheet resilience. Peabody is a long-established and respected
operator and we will work together and with our workforce, local communities, government, customers and
partners to ensure a successful transition."
Jim Grech, President and Chief Executive Officer of Peabody, commented: "We're pleased to acquire these
world-class assets from Anglo American, a company that shares our strong values of safety, sustainability and
social license to operate. We look forward to integrating these assets, teaming up with their highly skilled
workforce, and aligning with our new mine joint venture partners to create long-term value."
The Steelmaking Coal Portfolio consists primarily of an 88.0% interest in the Moranbah North joint venture; a
70% interest in the Capcoal joint venture; an 86.36% interest in the Roper Creek joint venture; a 51.0% interest
in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the
Theodore South joint venture; and a 50.0% interest in the Moranbah South joint venture.
The Transaction is subject to a number of conditions, including customary competition and regulatory clearances,
and pre-emption arrangements. The upfront cash consideration is subject to normal completion adjustments
and completion is expected by the third quarter of 2025. Peabody has agreed to pay a US$75 million deposit on
signing which Anglo American is entitled to retain if the sale is terminated in certain limited circumstances.
Footnotes:
1 Total non-contingent net proceeds from the sale of the Jellinbah interest and this Transaction are estimated to be approximately US$3.6
billion.
2 The deferred cash consideration will be paid in four instalments occurring annually from the first anniversary of the transaction
completion date, as follows: payment 1: US$111.2 million; payment 2: US$225.8 million; payment 3: US$225.8 million; payment 4:
US$162.2 million.
3 The price-linked earnout comprises uncapped quarterly payments of up to US$550 million in aggregate, applicable for five years starting
from the first day of the quarter following the transaction completion date. The quarterly payment will be calculated as 35% of
incremental revenue from equity coal production (excluding Dawson) above agreed metallurgical and thermal coal prices. The precise
trigger prices above which payments are made differ by product, but broadly align to PLV HCC Benchmark prices of: Year 1 US$240/t;
Year 2 US$235/t; Year 3 US$240/t; Year 4 US$246/t; Year 5 US$252/t.
4 The contingent cash consideration comprises a US$250 million payment due one month after the reopening of the Grosvenor mine,
defined as the earlier of i) first sale of coal from longwall coal production from the Grosvenor mine; or ii) 1.5 Mt of cumulative run-of-
mine coal production from the Grosvenor mine, and a US$200 million payment on the second anniversary of the reopening of the
Grosvenor mine.
For further information, please contact:
Media Investors
UK UK
James Wyatt-Tilby Tyler Broda
james.wyatt-tilby@angloamerican.com tyler.broda@angloamerican.com
Tel: +44 (0)20 7968 8759 Tel: +44 (0)20 7968 1470
Marcelo Esquivel Michelle West-Russell
marcelo.esquivel@angloamerican.com michelle.west-russell@angloamerican.com
Tel: +44 (0)20 7968 8891 Tel: +44 (0)20 7968 1494
Rebecca Meeson–Frizelle Asanda Malimba
rebecca.meeson-frizelle@angloamerican.com asanda.malimba@angloamerican.com
Tel: + 44 (0)20 7968 1374
Tel: +44 (0)20 7968 8480
South Africa
Nevashnee Naicker
nevashnee.naicker@angloamerican.com
Tel: +27 (0)11 638 3189
The Company has a primary listing on the Main Market of the London Stock Exchange and secondary listings on
the Johannesburg Stock Exchange, the Botswana Stock Exchange, the Namibia Stock Exchange and the SIX Swiss
Exchange.
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Notes:
Anglo American is a leading global mining company focused on the responsible production of copper, premium
iron ore and crop nutrients – future-enabling products that are essential for decarbonising the global economy,
improving living standards, and food security. Our portfolio of world-class operations and outstanding resource
endowments offers value-accretive growth potential across all three businesses, positioning us to deliver into
structurally attractive major demand growth trends.
Our integrated approach to sustainability and innovation drives our decision-making across the value chain, from
how we discover new resources to how we mine, process, move and market our products to our customers –
safely, efficiently and responsibly. Our Sustainable Mining Plan commits us to a series of stretching goals over
different time horizons to ensure we contribute to a healthy environment, create thriving communities and build
trust as a corporate leader. We work together with our business partners and diverse stakeholders to unlock
enduring value from precious natural resources for our shareholders, for the benefit of the communities and
countries in which we operate, and for society as a whole. Anglo American is re-imagining mining to improve
people's lives.
Anglo American is currently implementing a number of major structural changes to unlock the inherent value in
its portfolio and thereby accelerate delivery of its strategic priorities of operational excellence, portfolio
simplification, and growth. This portfolio transformation will focus Anglo American on its world-class resource
asset base in copper, premium iron ore and crop nutrients, once the sale of our steelmaking coal and nickel
businesses, the demerger of our PGMs business (Anglo American Platinum), and the separation of our iconic
diamond business (De Beers) have been completed.
www.angloamerican.com
Group terminology
In this document, references to "Anglo American", the "Anglo American Group", the "Group", "we", "us", and "our" are to
refer to either Anglo American plc and its subsidiaries and/or those who work for them generally, or where it is not necessary
to refer to a particular entity, entities or persons. The use of those generic terms herein is for convenience only, and is in no
way indicative of how the Anglo American Group or any entity within it is structured, managed or controlled. Anglo American
subsidiaries, and their management, are responsible for their own day-to-day operations, including but not limited to securing
and maintaining all relevant licences and permits, operational adaptation and implementation of Group policies,
management, training and any applicable local grievance mechanisms. Anglo American produces group-wide policies and
procedures to ensure best uniform practices and standardisation across the Anglo American Group but is not responsible for
the day to day implementation of such policies. Such policies and procedures constitute prescribed minimum standards only.
Group operating subsidiaries are responsible for adapting those policies and procedures to reflect local conditions where
appropriate, and for implementation, oversight and monitoring within their specific businesses.
Disclaimer
This document is for information purposes only and does not constitute, nor is to be construed as, an offer to sell or the
recommendation, solicitation, inducement or offer to buy, subscribe for or sell shares in Anglo American or any other
securities by Anglo American or any other party. Further, it should not be treated as giving investment, legal, accounting,
regulatory, taxation or other advice and has no regard to the specific investment or other objectives, financial situation or
particular needs of any recipient.
Forward-looking statements and third party information
This document includes forward-looking statements. All statements other than statements of historical facts included in this
document, including, without limitation, those regarding Anglo American's financial position, business, acquisition and
divestment strategy, dividend policy, plans and objectives of management for future operations, prospects and projects
(including development plans and objectives relating to Anglo American's products, production forecasts and Ore Reserve
and Mineral Resource positions) and sustainability performance related (including environmental, social and governance)
goals, ambitions, targets, visions, milestones and aspirations, are forward-looking statements. By their nature, such forward-
looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of Anglo American or industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future
business strategies and the environment in which Anglo American will operate in the future. Important factors that could
cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking
statements include, among others, levels of actual production during any period, levels of global demand and commodity
market prices, unanticipated downturns in business relationships with customers or their purchases from Anglo American,
mineral resource exploration and project development capabilities and delivery, recovery rates and other operational
capabilities, safety, health or environmental incidents, the effects of global pandemics and outbreaks of infectious diseases,
the impact of attacks from third parties on our information systems, natural catastrophes or adverse geological conditions,
climate change and extreme weather events, the outcome of litigation or regulatory proceedings, the availability of mining
and processing equipment, the ability to obtain key inputs in a timely manner, the ability to produce and transport products
profitably, the availability of necessary infrastructure (including transportation) services, the development, efficacy and
adoption of new or competing technology, challenges in realising resource estimates or discovering new economic
mineralisation, the impact of foreign currency exchange rates on market prices and operating costs, the availability of
sufficient credit, liquidity and counterparty risks, the effects of inflation, terrorism, war, conflict, political or civil unrest,
uncertainty, tensions and disputes and economic and financial conditions around the world, evolving societal and stakeholder
requirements and expectations, shortages of skilled employees, unexpected difficulties relating to acquisitions or divestitures,
competitive pressures and the actions of competitors, activities by courts, regulators and governmental authorities such as
in relation to permitting or forcing closure of mines and ceasing of operations or maintenance of Anglo American's assets and
changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American
operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American's most
recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue
reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of
this document. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the
City Code on Takeovers and Mergers, the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct
Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the
Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any
updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's
expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Nothing in this document should be interpreted to mean that future earnings per share of Anglo American will necessarily
match or exceed its historical published earnings per share. Certain statistical and other information included in this
document is sourced from third party sources (including, but not limited to, externally conducted studies and trials). As such
it has not been independently verified and presents the views of those third parties, but may not necessarily correspond to
the views held by Anglo American and Anglo American expressly disclaims any responsibility for, or liability in respect of, such
information.
©Anglo American Services (UK) Ltd 2024. TM and TM are trademarks of Anglo American Services (UK) Ltd.
Legal Entity Identifier: 549300S9XF92D1X8ME43
Date: 25-11-2024 09:00:00
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