The transaction has an economic effective date of 31 December, with an aggregate purchase consideration of US$588 million to buy out the two thirds of the mine Glencore did not own.
Based on expected operating performance and forward coal prices, assuming a closing during H1 2022, Glencore anticipates the cash generated by the operation to reduce the effective aggregate cash consideration to approximately $230 million, making the estimated investment payback period less than two years from closing.
Glencore CEO Ivan Glasenberg said the company had been involved with Cerrejón for more than 20 years.
"We know the asset well and believe that we are the most responsible steward for Cerrejón at this stage of its lifecycle," he said.
"Disposing of fossil fuel assets and making them someone else's issue is not the solution and it won't reduce absolute emissions.
"We are confident we can manage the decline of our fossil fuel portfolio in a responsible manner that is also consistent with meeting the goals of the Paris Agreement, as demonstrated by our strengthened total emission reduction targets."
BHP said selling its financial interest to a current Cerrejón shareholder who understood the operation represented a strong outcome for Cerrejón and the stakeholders it supported.
A further impairment charge of approximately $80 million post-tax will be recognised as an exceptional item in the BHP financial results for the second half of the 2021 financial year.
Anglo American CEO Mark Cutifani said the agreement marked the final stage of the company's transition from thermal coal operations.
"During that transition, we have sought to balance the expectations of our wide range of different stakeholders as we have divested our portfolio of thermal coal operations, in each case choosing the exit option most appropriate for the asset and its distinct local and broader circumstances," he said.
The transactions are subject to various regulatory approvals and are inter-conditional on each other.
Glencore said it carefully considered how best to respond to the sale notices in a manner that reflected its commitment to achieving the Paris Agreement goals and acknowledged its obligation to act as a responsible steward of assets.
"Based on our long-term relationship with Cerrejón and knowledge of the asset, we strongly believe that acquiring full ownership is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with our commitment to a responsible managed decline of our coal portfolio," it said.
"Production volumes are expected to decline materially from 2030.
"The alternative is one or more new JV partners acquiring these shares and compromising the sustainable operating philosophy of Cerrejón and extending production beyond the current mining concessions.
"Equally, a disposal of Glencore's current stake in the mine would not be consistent with our stated commitment to a responsible managed decline of our coal portfolio, nor would it result in a genuine reduction of absolute greenhouse gas emissions."
Glencore said it has reviewed the impact of owning 100% of Cerrejón and is confident its climate commitments will not be compromised by this partner buy-out.
"We have further reviewed our planned fossil fuel production profile and are now able to commit to more aggressive total emission reduction targets," it said.
Glencore will increase our medium-term absolute total emissions reduction target [Scope 1+2+3] from 40% to 50% by 2035 on 2019 levels1; and will introduce a new short-term reduction target of 15% by 2026 on 2019 levels.
"Our focus remains on our total emissions footprint, including our scope 3 emissions, which is critical in order to achieve the goals of the Paris Agreement," it said.
"Glencore will continue to prioritise capital allocation towards commodities essential for the transition to a low carbon economy."