Peabody Energy is selling its stake in Prairie State Energy Campus as part of a move to divest noncore assets.
Wabash Valley Power Association, an Indianapolis-based power generation and transmission cooperative, will pay $57 million to acquire the 5.06-percent share of Prairie State held by a Peabody subsidiary, the St. Louis coal company announced Thursday.
A definitive agreement was entered into after a competitive bidding process Peabody launched in the fourth quarter of 2015, Peabody said.
Prairie State is a 1,600 megawatt coal-fueled electricity generation plant and adjacent coal mine in Washington, St. Clair and Randolph counties in Illinois. It began operations in 2012.
Situated about an hour southeast of St. Louis, Prairie State has been the target of lawsuits brought by municipalities that claimed they signed costly electricity contracts based on misleading information provided by project promoters.
The transaction, which is subject to governmental and regulatory approvals, is expected to close before the end of the second quarter of 2016, Peabody said.
Asset sales by Peabody have yielded nearly $500 million since the beginning of the second quarter, the company said. They include the sale of New Mexico and Colorado mines for $358 million in cash.
Peabody said it was focusing on core mining assets in the Powder River Basin, Illinois Basin and Australia.