May 5 (Reuters) - Peabody Energy ( BTU ) said on Monday

if issues involving Anglo American's Moranbah North mine

were not resolved to its satisfaction, it may elect to terminate

its pending deal to acquire some of the British mining company's

Australian steelmaking coal assets.

Production at Anglo American's Moranbah North coal mine -

located in the Bowen basin in Queensland, Australia - was

suspended after an underground fire broke out at the mine in

March.

The mine is included in the assets deal signed between the

companies last year.

"A substantial share of the acquisition value was associated

with Moranbah North, yet there is no known timetable for

resuming longwall production," Peabody Chief Executive Officer

Jim Grech said in a statement.

Peabody said it may walk away from the deal, if the issues

at the mine were not resolved within the timeframe specified

under the acquisition agreements.