Anglo American has agreed to sell its Australian steelmaking coal mines to Dhilmar in a deal worth up to $3.88 billion, as the miner moves to simplify its business before a planned merger with Canada’s Teck Resources. Dhilmar will pay $2.3 billion in cash when the deal closes, with a further $1.58 billion tied to performance.

The sale is subject to regulatory approval and is expected to complete by the first quarter of 2027. Anglo American said the transaction reflects the quality of the assets and the people running them. Chief Executive Duncan Wanblad said Dhilmar’s leadership has experience operating major mining assets in steelmaking coal, Southeast Asia and Canada, and said the two companies would work with staff, local communities, government, customers and partners to ensure a smooth transition.

The deal comes after Anglo American completed the $1.6 billion sale of its stake in Jellinbah Group last year and after shareholders backed its planned merger with Teck last December. That combination will create Anglo Teck, a much larger group built around a tighter portfolio of mining assets. The latest sale is another step in that strategy, reducing complexity while raising cash ahead of the combination.

Dhilmar is also pushing deeper into mining through acquisitions. The UK-based miner bought the Eleonore gold mine in Canada from Newmont Corporation last year for $795 million, giving it a larger footprint across commodities and regions. The Australian coal assets add another major position to a company that has been building quickly through deals rather than waiting for organic growth.

The transaction still faces the usual approval process, but the broad direction is clear: Anglo American is exiting another non-core business, and Dhilmar is using the moment to widen its reach. If approved, the sale will shift a set of long-running Australian coal operations into the hands of a miner that has shown it is willing to buy big and move fast.