Anglo American announces that it has now entered into definitive agreements to sell the entirety of its steelmaking coal business, to generate up to US$4.9 billion in aggregate gross cash proceeds¹, including the already announced sale of Anglo American's interest in Jellinbah for approximately US$1.1 billion.

Announced today, Anglo American has agreed to sell its portfolio of steelmaking coal mines that it operates in Australia ("Steelmaking Coal Portfolio") to Peabody Energy ("Peabody") for a cash consideration of up to US$3.775 billion ("the Transaction").

Peabody's agreed cash consideration of up to US$3.775 billion comprises an upfront cash consideration of US$2.05 billion at completion; deferred cash consideration² of US$725 million; the potential for up to US$550 million in a price-linked earnout³; and contingent cash consideration⁴ of US$450 million linked to the reopening of the Grosvenor mine.

Duncan Wanblad, Chief Executive of Anglo American, said "The sale of our steelmaking coal business is another important step towards delivering the strategy that we set out in May to create a world class copper, premium iron ore and crop nutrients business. Through focus, asset quality and outstanding growth options, Anglo American will offer a highly differentiated investment proposition supported by strong cash generation and the capabilities and longstanding relationship networks that can deliver our full potential. We are absolutely focused on delivering that strategy and unlocking the associated value as we streamline our cost structures and create a much simpler, more resilient and more agile business that will enable full market value recognition.

"All the transactions to deliver our portfolio transformation are well in train - the demerger of Anglo American Platinum is expected by mid-2025 and we have seen strong interest in our nickel business with the sale process well progressed. We expect De Beers to follow, recognising its unmatched industry and brand position and good progress in working with stakeholders to position the business for long term success as we work toward separation for value. We are well progressed with the delivery of $1 billion of cost savings and have detailed plans in place to deliver at least an additional US$800 million in pre-tax recurring cost benefits on a run-rate basis from the end of 2025 as we progress the portfolio transformation.

"In steelmaking coal, through a combination of today's announced Transaction and our previously announced agreement to sell our interest in Jellinbah, we stand to unlock up to US$4.9 billion of value, reflecting the high quality of the assets and adding to our balance sheet resilience. Peabody is a long-established and respected operator and we will work together and with our workforce, local communities, government, customers and partners to ensure a successful transition."

Jim Grech, President and Chief Executive Officer of Peabody, commented: "We're pleased to acquire these world-class assets from Anglo American, a company that shares our strong values of safety, sustainability and social license to operate. We look forward to integrating these assets, teaming up with their highly skilled workforce, and aligning with our new mine joint venture partners to create long-term value."

The Steelmaking Coal Portfolio consists primarily of an 88.0% interest in the Moranbah North joint venture; a 70% interest in the Capcoal joint venture; an 86.36% interest in the Roper Creek joint venture; a 51.0% interest in the Dawson joint venture, Dawson South joint venture, Dawson South Exploration joint venture and the Theodore South joint venture; and a 50.0% interest in the Moranbah South joint venture.

The Transaction is subject to a number of conditions, including customary competition and regulatory clearances, and pre-emption arrangements. The upfront cash consideration is subject to normal completion adjustments and completion is expected by the third quarter of 2025. Peabody has agreed to pay a US$75 million deposit on signing which Anglo American is entitled to retain if the sale is terminated in certain limited circumstances.

Footnotes:

¹   Total non-contingent net proceeds from the sale of the Jellinbah interest and this Transaction are estimated to be approximately US$3.6 billion.

² The deferred cash consideration will be paid in four instalments occurring annually from the first anniversary of the transaction completion date, as follows: payment 1: US$111.2 million; payment 2: US$225.8 million; payment 3: US$225.8 million; payment 4: US$162.2 million.

³ The price-linked earnout comprises uncapped quarterly payments of up to US$550 million in aggregate, applicable for five years starting from the first day of the quarter following the transaction completion date. The quarterly payment will be calculated as 35% of incremental revenue from equity coal production (excluding Dawson) above agreed metallurgical and thermal coal prices. The precise trigger prices above which payments are made differ by product, but broadly align to PLV HCC Benchmark prices of: Year 1 US$240/t; Year 2 US$235/t; Year 3 US$240/t; Year 4 US$246/t; Year 5 US$252/t.

⁴ The contingent cash consideration comprises a US$250 million payment due one month after the reopening of the Grosvenor mine, defined as the earlier of i) first sale of coal from longwall coal production from the Grosvenor mine; or ii) 1.5 Mt of cumulative run-of-mine coal production from the Grosvenor mine, and a US$200 million payment on the second anniversary of the reopening of the Grosvenor mine.

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Notes:

Anglo American is a leading global mining company focused on the responsible production of copper, premium iron ore and crop nutrients - future-enabling products that are essential for decarbonising the global economy, improving living standards, and food security. Our portfolio of world-class operations and outstanding resource endowments offers value-accretive growth potential across all three businesses, positioning us to deliver into structurally attractive major demand growth trends.

Our integrated approach to sustainability and innovation drives our decision-making across the value chain, from how we discover new resources to how we mine, process, move and market our products to our customers - safely, efficiently and responsibly. Our Sustainable Mining Plan commits us to a series of stretching goals over different time horizons to ensure we contribute to a healthy environment, create thriving communities and build trust as a corporate leader. We work together with our business partners and diverse stakeholders to unlock enduring value from precious natural resources for our shareholders, for the benefit of the communities and countries in which we operate, and for society as a whole. Anglo American is re-imagining mining to improve people's lives.

Anglo American is currently implementing a number of major structural changes to unlock the inherent value in its portfolio and thereby accelerate delivery of its strategic priorities of operational excellence, portfolio simplification, and growth. This portfolio transformation will focus Anglo American on its world-class resource asset base in copper, premium iron ore and crop nutrients, once the sale of our steelmaking coal and nickel businesses, the demerger of our PGMs business (Anglo American Platinum), and the separation of our iconic diamond business (De Beers) have been completed.

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Forward-looking statements and third party information

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Such forward-looking statements are based on numerous assumptions regarding Anglo American's present and future business strategies and the environment in which Anglo American will operate in the future. Important factors that could cause Anglo American's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of global demand and commodity market prices, unanticipated downturns in business relationships with customers or their purchases from Anglo American, mineral resource exploration and project development capabilities and delivery, recovery rates and other operational capabilities, safety, health or environmental incidents, the effects of global pandemics and outbreaks of infectious diseases, the impact of attacks from third parties on our information systems, natural catastrophes or adverse geological conditions, climate change and extreme weather events, the outcome of litigation or regulatory proceedings, the availability of mining and processing equipment, the ability to obtain key inputs in a timely manner, the ability to produce and transport products profitably, the availability of necessary infrastructure (including transportation) services, the development, efficacy and adoption of new or competing technology, challenges in realising resource estimates or discovering new economic mineralisation, the impact of foreign currency exchange rates on market prices and operating costs, the availability of sufficient credit, liquidity and counterparty risks, the effects of inflation, terrorism, war, conflict, political or civil unrest, uncertainty, tensions and disputes and economic and financial conditions around the world, evolving societal and stakeholder requirements and expectations, shortages of skilled employees, unexpected difficulties relating to acquisitions or divestitures, competitive pressures and the actions of competitors, activities by courts, regulators and governmental authorities such as in relation to permitting or forcing closure of mines and ceasing of operations or maintenance of Anglo American's assets and changes in taxation or safety, health, environmental or other types of regulation in the countries where Anglo American operates, conflicts over land and resource ownership rights and such other risk factors identified in Anglo American's most recent Annual Report. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this document. Anglo American expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Conduct Authority, the Listings Requirements of the securities exchange of the JSE Limited in South Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian Stock Exchange and any other applicable regulations) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Anglo American's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Nothing in this document should be interpreted to mean that future earnings per share of Anglo American will necessarily match or exceed its historical published earnings per share. Certain statistical and other information included in this document is sourced from third party sources (including, but not limited to, externally conducted studies and trials). As such it has not been independently verified and presents the views of those third parties, but may not necessarily correspond to the views held by Anglo American and Anglo American expressly disclaims any responsibility for, or liability in respect of, such information.

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