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Peabody's Australian coal assets under strategic review for potential divestment

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Peabody's Australian coal assets under strategic review for potential divestment

Financialadvisory and asset management firm, Lazard Australia, is running a strategicreview and is assessing market appetite for Peabody Energy Corp.'s Australian coal assets, The Australian Financial Review's StreetTalk reported July 12.

Thefirm called on potential buyers for the assets, informing them that the reviewis likely to lead to the giant coal company's divestment of its metallurgical coalmines in Australia. The review follows Peabody's recent agreement to its interest in undevelopedmetallurgical reserve tenements in Queensland's Bowen Basin for A$104 millionin cash plus royalties, said the report.

"Whileindividual assets in the U.S. and Australia have been a part of our approachtoward portfolio optimisation, the company has said many times that theAustralian assets represent a core region with excellent access tohigher-demand Asia markets through our thermal and metallurgicalplatform," Street Talk quoted a Peabody spokesperson as saying.  

InSeptember 2015, Peabody, through its subsidiary , also soldits Wotonga coking coal deposit in Queensland, Australia, to

Thelong-drawn-out market slump has compelled coal producers to place their assetsout on the market. From January 2015 through April 2016, international coalassets on the market reached roughly $1.23 billion, with 61.5% of the completed acquisitionstaking place in Australia, satisfying roughly $757 million of the deal valuetotal.

In aprevious interview with S&P Global Market Intelligence, Marian Hookham,senior manager at IHS' coal arm, said "the expansionary phase of theAustralian mining boom is over and we are now seeing a reorganization of assetholdings around strategic drivers of each business."

As of July 11, US$1 isequivalent to 1.33 Australian dollars.