Peabody Energy’s $5.7 billion acquisition of Anglo American’s Queensland coal assets is facing serious uncertainty following a recent explosion at the Moranbah North mine. The incident, which halted operations due to an underground fire, marks the second such event at an Anglo American site within a year, with the nearby Grosvenor mine also still closed after a fire in June. Originally set to finalize the deal by mid-2025, Peabody is now reconsidering its position in light of safety concerns and potential operational setbacks. The deal encompasses four major mining operations—Moranbah North, Grosvenor, Aquila, and Capcoal. With the acquisition in doubt, the livelihoods of hundreds of mine workers hang in the balance, raising alarm within local communities and the mining union.

Mitch Hughes, president of the Mining and Energy Union in Queensland, acknowledged the unease among workers, emphasizing that, despite uncertainties surrounding ownership, ensuring safety remains the primary concern. Investigations into the recent fire are ongoing, with Resources Safety and Health Queensland among the authorities involved. Meanwhile, Peabody confirmed it is in continued discussions with Anglo American to assess the implications of the incident and to determine whether it qualifies as a “material adverse change” under the purchase agreement. If triggered, this clause could allow Peabody to exit the deal without penalty.

The potential unraveling of the deal has prompted concern among local leaders. Isaac Regional Council Mayor Kelly Vea Vea underlined the broader significance of the transaction, noting that it affects more than just mining assets, with over 800 homes, critical water services, and infrastructure tied to the operations. She urged both the government and corporate stakeholders to prioritize the wellbeing of the impacted communities, hoping that workers and residents are not overlooked in the business deliberations.

For Anglo American, the sale is part of a broader restructuring plan aimed at refocusing its business on copper, iron ore, and crop nutrients. CEO Duncan Wanblad views the sale of the coal assets as central to this transition. The deal promises Anglo $3.43 billion in immediate cash, with potential for an additional $1 billion depending on future coal prices and the restoration of production at Grosvenor. The explosion, however, threatens to derail this strategy.

Peabody’s involvement in the Australian coal sector has been turbulent in the past, with its $4.9 billion purchase of MacArthur Coal in 2011 ending in bankruptcy just five years later. While Peabody CEO Jim Grech previously framed the Anglo deal as a strategic shift toward steelmaking coal, recent market volatility and operational risks are now forcing a reassessment. As the investigation continues, workers and communities await the outcome, hoping for stability amid the growing uncertainty.