Peabody Energy has agreed to acquire the bulk of coking coal assets that UK-South African mining firm Anglo American is seeking to divest as it exits the coal sector.
Peabody plans to buy Anglo's majority stakes, at up to $3.8bn, in four metallurgical coal mines — Moranbah North, Grosvenor, Aquila and Capcoal — located in Australia's Bowen Basin, with the transaction expected to close by mid-2025 and subject to customary closing conditions, the producer said in a statement.
With the acquisition of coal mines, Peabody's combined US-Australia production will rise from 10.6mn short tons/yr at present, to an estimate of 11.3mn st/yr (10.25mn t) by 2026, according to Peabody, strengthening the producer's position in the premium hard coking coal (PHCC) market.
Moranbah North, Grosvenor and Aquila are PHCC mines, while Capcoal produces a combination of PHCC, pulverised coal injection (PCI) and other coal grades.
At present, Australian low volatile hard coking coal, or tier-2 coking coal, accounts for 55pc of Peabody's 7.4mn st in coking coal sales, but the acquisition of new assets will bring PHCC's share up to 51pc and reduce its tier 2 coal to 24pc. Peabody also produces high volatile A coal in the US, accounting for 12pc of sales this year.
In addition to the sale of assets to Peabody, Anglo has agreed to sell the Dawson mine in Central Queensland to Indonesian mining company PT Bukit Makmur Mandiri Utama (BUMA) for $455mn.
Earlier this month, Anglo agreed the sale of its 33pc share of the Jellinbah Group coking coal joint venture to partner Australia-based Zashvin at $A1.6bn ($1.04bn).
In May, Anglo announced plans to exit its coal, platinum, nickel and diamond businesses shortly after rejecting repeated takeover bids from Australian resources firm BHP.
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Wyoming Sees Mixed Economic Forecast for 2025, Report Finds
Wyoming’s economic outlook is mixed for 2025, with a continuing decline in the coal industry, shortages in housing and childcare and an aging population clouding the state’s mid- and long-term growth prospects, according to a new University of Wyoming report.
The Center for Business and Economic Analysis in UW’s College of Business issued its second annual Wyoming Economic Forecast in conjunction with the Governor’s Business Forum.
“The year ahead for Wyoming holds many opportunities and challenges, including finding solutions to current binding constraints for growth — housing affordability for workers, challenging transportation and connectivity resulting in constrained access to markets, a thin and complex labor market, and the brain drain in our higher-education graduates, among others,” the report reads.
Still, the report predicts a slight increase in the state’s labor force in 2025, with just a small increase in the unemployment rate to 3.2%, lower than the national rate. The state’s population is also expected to increase slightly.
The UW economists used the large-scale structural economic forecasting model Moody’s Analytics, along with conversations with Wyoming and regional business leaders, to develop the economic outlook report.
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Capito, Manchin Announce Progress Empowering West Virginia to Permit Carbon Storage Projects
U.S. Senator Shelley Moore Capito (R-W.Va.), Ranking Member of the Environment and Public Works (EPW) Committee, and U.S. Senator Joe Manchin (I-W.Va.), Chairman of the Senate Committee on Energy and Natural Resources, and Senator have announced that the Environmental Protection Agency (EPA) has proposed granting West Virginia the authority to oversee and administer the Class VI well program in the state, which is more commonly known as Class VI “primacy.” These wells are designed to inject carbon dioxide (CO2) into deep rock formations and serve as critical infrastructure for deploying carbon capture and storage (CCS) projects. Once finalized, primacy will allow a CCS project developer in West Virginia to apply directly for permits from the West Virginia Department of Environmental Protection (WVDEP), accelerating the process, which currently requires a permit from EPA, while still upholding strict safety standards.
Senators Shelley Moore Capito and Joe Manchin
“After too long of a delay, it is welcome news that EPA has taken this step towards granting West Virginia the authority we need to properly implement carbon capture technology. I have frequently said that the states are better suited than Washington to carry out this authority and get these projects up and running. Carbon capture, use, and storage is essential to protecting our ability to provide reliable, baseload power in West Virginia through coal and natural gas, while reducing our power and manufacturing sector emissions. I look forward to the swift finalization of this authority and its enactment in our state,” Ranking Member Capito said.
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RWE and Peabody Partner to Develop Solar and Energy Storage Pipeline on Repurposed, Reclaimed Mine Lands
RWE, a leading renewable energy company, and Peabody (NYSE: BTU) today announced a new partnership to strategically advance renewable energy projects by repurposing reclaimed land previously used for mining. This innovative global partnership brings together RWE's expertise in developing and operating clean energy projects and Peabody's significant land resources, particularly in the Midwest, as well as its industry leading reclamation capabilities.
RWE is acquiring a majority interest in the R3 Renewables LLC ownership group alongside founding partner Peabody. R3, a joint venture launched by Peabody, Summit Partners Credit Advisors ("SPCA") and Riverstone Credit Partners ("Riverstone"), repurposes land previously used for coal mining to deliver clean, renewable energy. RWE is acquiring SPCA and Riverstone's equity interest in R3 and Peabody will retain a 25 percent equity interest.
The acquisition, which is focused on the development of large-scale solar and energy storage projects on reclaimed mine lands, demonstrates RWE's commitment to innovative and clean energy solutions. As a founding partner of R3 Renewables, Peabody is leveraging its substantial land resources to foster sustainable energy development, highlighting its dedication to environmental stewardship and community revitalization.
The founding partners of R3 Renewables initiated the development of 5.5 Gigawatt (GW) pipeline of 10 potential projects on reclaimed mining sites in Indiana and Illinois. RWE will acquire seven of the projects and enter into a joint venture with Peabody to continue development of the three remaining projects.
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NERC Warns of Power Shortfalls During Bitter Cold this Winter
Winter is here. The first snow of the season is expected across parts of the Midwest, Northeast, Great Lakes and even into the Southeast later this week. At elevation, a foot or more of snow could be coming. In the Northwest, a “bomb cyclone” storm is forming offshore with the potential to have the intensity of a hurricane.
The arrival of nasty winter weather comes as the North American Electric Reliability Corp. (NERC) released its annual Winter Reliability Assessment. While NERC doesn’t foresee issues during normal winter weather conditions, extreme winter weather — read: the kind we’re already seeing well in advance of the first day of winter — could cause energy shortfalls across much of the country. Defining “extreme” is a question of semantics. But what is clear, should we see the biting cold, ice storms and blizzards that come every year, grids across the nation will be pushed to the limit.
The loss of so much fuel-secure, dispatchable coal generation over the past decade is colliding with soaring power demand, leaving grid operators under a constant threat of crisis.
The Gas Vulnerability
What has NERC most concerned is the potential for freezing temperatures to impact delivery of natural gas to power plants. This is a reoccurring and devastating problem.
It was precisely this problem that was the leading cause of the blackouts that crippled Texas in 2021 when winter storm Uri claimed the lives of 246 people. While Texas has taken some steps to weatherize its grid and its natural gas system, national efforts to do so are glaringly absent.
NERC has found that outside of Texas, there is “little to no information to indicate that upstream gas producers, gatherers, and processors have improved winterization of their operations.”
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