Peabody Energy Corp., the largest U.S. coal producer, sold an Australian mine 10 months after a previous deal for the complex collapsed.
Peabody sold its shuttered Wilkie Creek Mine in Queensland to Sekitan Resources Pty Ltd. for $20 million in cash and the assumption of $55 million in liabilities, the St. Louis-based company said in a statement Wednesday. The deal releases Peabody from “certain guarantees in place for reclamation activities,” it said.
Peabody is looking to sell assets in the U.S. and Australia as it tries to weather the coal industry’s worst downturn in decades. The company announced the closing of Wilkie Creek in December 2013 because of falling prices for the power-plant fuel, which have extended their decline since then by about 29 percent.
“The Wilkie Creek agreement is one example of a number of steps Peabody is taking to optimize its portfolio through sale of non-core assets,” Vic Svec, a spokesman for the company, said in an e-mail.
In May 2014, Peabody agreed to sell Wilkie Creek for $70 million to former billionaire Nathan Tinkler. That deal, which involved different assets, collapsed in August after Tinkler failed to make payments.
“We suspect anything and everything is for sale at the right price,” Mark Levin, an analyst at BB&T Capital Markets, said in a note Monday, referring to Peabody and the rest of the U.S. coal industry. “Unfortunately, the opportunity to get maximum value for these assets is limited.”
Sekitan is a subsidiary of Exergen Pty Ltd., an Australian clean coal technology company. The deal is expected to close in the third quarter of 2015, Peabody said.