Anglo American has agreed to sell its remaining coal portfolio to Peabody Energy for up to $3.8bn (£3bn).
The deal consists of an upfront cash payment of $2.1bn upfront as well as $725m deferred payment.
Peabody has also agreed the potential for up to $550m in a price-linked earnout and $450m linked to the reopening of the Grosvenor mine.
The portfolio includes an 88 per cent interest in the Moranbah North joint venture, an 86 per cent stake in the Roper Creek joint venture and a 70 per cent interest in the Capcoal joint venture, all based in Australia.
Following the already announced sale of Anglo American’s interest in Jellinbah, the deal means that the sale of its coal business will generate up to $4.9bn.
The deal comes as Anglo American embarks on a radical restructuring after fighting off interest from rival BHP earlier this year.
The company has laid out plans to slim down its business and spin-off or sell non-core divisions.
“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,” Duncan Wanblad, chief executive of Anglo American said.
“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.”
Jim Grech, president and chief executive of Peabody, said: “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.”
The deal is subject to a number of conditions, including customary competition and regulatory clearances. Completion is expected by the third quarter of 2025.