Anglo American has sold its remaining steelmaking coal mine portfolio to Peabody Energy for $3.77bn (£3bn).

The deal is part of the firm’s agreement to sell the entirety of its coal business, aiming to generate up to $4.9bn (£3.89bn) in cash proceeds, including the already announced sale of its interest in Jellinbah for approximately $1.1bn (£870m).

Peabody’s cash consideration comprises $2.05bn at completion, deferred cash consideration $725m, the potential of up to $550m in a price-linked earnout and contingent cash consideration of $450m linked to the reopening of the Grosvenor mine.

Chief executive at Anglo American, Duncan Wanblad, said that the sale of the coal business is "another important step towards delivering the strategy" it set out in May to "create a world class copper, premium iron ore and crop nutrients business".

He added that the firm will "offer a highly differentiated investment proposition supported by strong cash generation and the capabilities and longstanding relationship networks" that can deliver its "full potential".

Wanblad stated: "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 $1bn (£790m) of cost savings and have detailed plans in place to deliver at least an additional $800m (£635m) in pre-tax recurring cost benefits on a run-rate basis from the end of 2025 as we progress the portfolio transformation.”

Investment director at AJ Bell, Russ Mould, stated that "it’s the end of an era for Anglo American as it joins Rio Tinto by fully exiting coal production", with two of the largest UK-listed diversified mines "turning their back on the commodity and sharpening their focus on fewer products lines".

He concluded: "Five years ago, the prospect of a miner getting out of coal would have been celebrated by investors from an ESG perspective. Now, there might not be such enthusiasm if it can be shown that coal can generate big money going forwards.

"Anglo is prioritising copper, premium iron ore and crop nutrients – just at a point where metal prices have been weak due to global economic uncertainty. It needs to keep banging the drum that these areas have big opportunities longer term and that any short-term issues can be overcome."

---