ST. LOUIS – Peabody Energy Corp., a St. Louis-based mining company, has discussed acquiring Colombian mining company Drummond International, LLC.
The Wall Street Journal reported on Wednesday that this is “ a deal that would cement a swift comeback from bankruptcy for America’s largest coal producer”.
Peabody was forced into bankruptcy in 2016 through a combination of debt and low coal prices. Over the last year, the company has come out of bankruptcy and seen coal reach its highest prices in years.
The Journal reported that this deal would consist of Peabody buying 80 percent of Drummond, which is Colombia’s top coal exporter. This deal would be valued between $4 billion to $4.5 billion.
The remaining 20 percent of Drummond would then be left for Japanese trading house, Itochu Corp.
It is still unclear how advanced these discussions have become and whether or not Peabody and Drummond will reach an agreement.
Peabody has already purchased a coal mine located in central Alabama from Drummond in Sept. for $400 million.
According to a press release, the Shoal Creek metallurgical coal mine provides coking coal to European and Asian markets.
The release also stated that the deal made in Sept. included the mine, preparation plant and supporting assets. The deal is expected to be closed by the end of the year.