Anglo's Australian coal mine stable after underground fire

By Felix Njini

JOHANNESBURG, April 10 (Reuters) - The situation at Anglo American's AAL.L Moranbah North coal mine in Australia is stable and there is no evidence of damage after an underground fire, the company said on Thursday.

Moranbah is one of several steelmaking coal assets that Anglo is selling to Peabody Energy BTU.N in a $3.78 billion deal that is expected to close mid-year.

Anglo said the fire was started by a "minor ignition" on March 31 and it was making progress towards the temporary suspension of mining operations.

"Conditions in the mine normalised shortly afterwards and they remain stable, with data and camera footage showing no evidence of damage," it said in a statement.

U.S.-based Peabody said on Tuesday it was "reviewing all options" regarding the acquisition of the steelmaking coal assets and had contacted Anglo to better understand the impact of the fire.

Peabody agreed to an upfront payment of about $2 billion at completion of the deal with Anglo, a $725 million deferred cash payment and another potential $550 million.

The deal also includes a contingent cash consideration of $450 million linked to the reopening of the Grosvenor mine, which suffered a fire in June, before the agreement was reached.

The Moranbah and Grosvenor mines are adjacent to each other.

If the Moranbah incident qualifies as a material adverse change in the agreement, Peabody "could walk away or the two parties could revise the terms of the transactions," Jefferies analysts said in a note on Wednesday.

Anglo said it was working with Peabody to satisfy the remaining conditions to complete the assets sale.

Anglo is selling the assets as part of a business revamp after it fought off a $49 billion takeover from bigger rival BHP Group BHP.AX last year. It is also selling its nickel business in Brazil, spinning off Anglo Platinum AMSJ.J and weighing options for its diamonds business.