The Australian mining company, South32, announced that it has decided to drop its planned acquisition of Peabody Energy Corporation’s coal mine located in New South Wales.
According to South32 CEO Graham Kerr, his company was dispositioned to pursue the deal and satisfy the country’s steelmakers, which means that the company is yet to make its first major acquisition. He said:
“To proceed with the acquisition, in light of the anticipated concessions, would have compromised the merits of the transaction and this is not something we are prepared to do.”
Aside from this, the decision came after Peabody, which is the largest privately owned coal producer in the world, emerged from bankruptcy earlier this April.
Also commenting on the failed negotiation between the two companies, Peabody Energy president Glenn Kellow stated that he was surprised with South32 reaching an impasse over the deal. He said:
“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.”
Moreover, the St. Louis, Missouri-based Peabody Energy announced that it is going to keep their coking coal mine, which produces 2 million tons per year, and its 17% stake in the Port Kembla coal terminal. According to its executives, they will resume shipments after they move to a new coal panel that will be completed by May this year.