Peabody Energy (NYSE: BTU) may walk away from its $3.8-billion bid for Anglo American’s Australian coking coal mines after an unexpected closure cast doubt over the high-profile sale.

The US miner agreed last year to buy the Queensland mines in the Bowen Basin, the world’s top coking coal region, as part of a push into steelmaking coal. But in March, Anglo had to halt its Moranbah North mine after an underground fire, triggered by high gas levels, broke out at the site.

The incident prompted Peabody to invoke a clause allowing either party to abandon or renegotiate if a major negative event occurs before completion. The clause triggered a 90-day consultation period, which expired on August 3.

Anglo maintains the closure is not “significant,” arguing damage and downtime will be limited. Chief executive Duncan Wanblad says the company stands by its legal position, is prepared to restart the sale process and now awaits Peabody’s decision.

Peabody, which has not reached revised terms, intends to provide an update on August 19, it said in its second quarter results.

The original deal included a $2.05-billion upfront payment, $725 million in deferred cash, up to $550 million in additional payments, and $450 million contingent on the reopening of the Grosvenor mine, after another fire there in June last year, ahead of the acquisition.

For Anglo, the sale marked the first major divestment in a broader restructuring plan. For Peabody, backing out could ease pressure on a looming $2-billion bridge loan, but it could also chill coal deal-making across Australia.

Peabody’s latest quarterly loss, on the back of a 33% dive in coking coal prices, left investors and rivals watching closely. With the deal in limbo, market sentiment could weaken further, clouding coal asset values and the short-term price outlook.