- The mining giant believes the incident involved a ‘minor ignition’ on 31 March
Anglo American remains in talks over the sale of its coal portfolio after its buyer said it was reviewing its options following a fire at an Australian mine.
The mining giant told shareholders that the situation at its Moranbah North site, which produces about 5.6 million tonnes of steelmaking coal annually, had stabilised following an explosion last week.
Anglo has an 88 per cent stake in Moranbah North, which in November it agreed to sell alongside most of its coal assets to Peabody Energy for a potential $3.8billion (£3billion).
It believes the incident involved a ‘minor ignition’ on 31 March in the underground area of the mine, which is located in Central Queensland’s Bowen Basin.
Anglo said conditions quickly normalised and ‘remain stable,’ with data and camera footage showing ‘no evidence of damage’.
Production at Moranbah North remains suspended, but the firm said it was working with industry experts and Queensland’s health and safety regulator to ‘expedite re-entry into the mine and the subsequent safe resumption of mining operations’.
Right direction: Last November, mining giant Anglo American agreed to sell most of its coal assets to Peabody Energy for a potential $3.8billion (£3billion)
But owing to the incident at Moranbah North, Peabody announced on Tuesday that it was ‘reviewing all options’ related to the acquisition.
It added that it ‘remains in conversation with Anglo American to better understand the impacts of the event. Peabody is preserving all rights and protections under its purchase agreements.’
Anglo said on Thursday that it ‘continues to work with Peabody towards satisfying the remaining customary conditions in those agreements that are required for completion of the transaction’.
The disposal forms part of a radical restructuring that Anglo launched after it rejected a blockbuster $39billion takeover approach from BHP.
In addition to its steelmaking coal business, Anglo plans to demerge its platinum arm and offload its nickel and De Beers diamond divisions.
Two months ago, the London-based firm agreed to sell the nickel business to MMG Singapore Resources for $500million.
The deal followed a massive slump in nickel prices caused by production oversupply from Indonesia and China, a stronger US dollar and subdued electric vehicle demand.
Anglo has said the overhaul would enable it to focus on producing copper, premium iron ore and crop nutrients.
Copper is a key material in the green transition due to its use in technologies like solar panels, power cables, wind turbines, and electric vehicles.
Anglo American shares soared 8.7 per cent to 1,918.6p on Thursday morning, making them the top FTSE 100 riser, although they have still contracted by around 19 per cent since the year began.
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Read More: Anglo American remains in talks over coal sale after Australian mine fire