Peabody announced today that it will retain the Metropolitan metallurgical coal mine and its associated 16.67 percent interest in Port Kembla Coal Terminal in the company's portfolio, after proposed purchaser South32 terminated the purchase contract after it was unable to obtain clearance from the Australian Competition and Consumer Commission (ACCC) within the timeframe required under the contract.
"We are surprised that South32 and the ACCC reached an impasse, given both the physical synergies and the global nature of the metallurgical coal markets," said Peabody President and Chief Executive Officer Glenn Kellow. "On the other hand, we see continuing opportunities given Metropolitan's quality coking coals and port location, and our objective will be to operate the mine while maximizing returns in the international marketplace."
Metropolitan Mine, which exports coal from Port Kembla in New South Wales, sold 2 million tons of hard coking coal in 2016 and has approximately 26 million tons of proven and probable reserves at Dec. 31, 2016. The mine employs approximately 250 employees and contractors.
As a result of South32 not completing the acquisition of the mine, Peabody will retain the previously negotiated deposit. The termination of the transaction has no effect on operations, and Metropolitan intends to fully resume shipments following scheduled completion of a longwall move to a new coal panel at the end of May.
Peabody intends to update its 2017 targets including Metropolitan Mine in its upcoming first quarter 2017 earnings release. The company intends to continue to pursue its financial priorities of reducing debt, investing for high returns and returning cash to shareholders over time.
Peabody is the world's largest private-sector coal company and a Fortune 500 company. The company is also a leading voice in advocating for sustainable mining, energy access and clean coal technologies. Peabody serves metallurgical and thermal coal customers in more than 25 countries on five continents. For further information, visit PeabodyEnergy.com.