MELBOURNE, Aug 12 (Reuters) - Peabody Energy ( BTU ) is

set to reveal on August 19 whether it will continue with its

$3.78 billion bid for Anglo American's Australian coking

coal mines, as time ticks down for it to renegotiate a lower

price for the deal.

The U.S. miner last year agreed to buy the mines in

Queensland's Bowen Basin, the world's top coking coal region, as

part of its move into becoming a coking coal producer.

But in March, the Moranbah North mine was closed due to high

gas levels, leading Peabody to trigger a clause that allows a

party to break or renegotiate a deal if a significant negative

event occurs between signing and completion. In this case, it

gave a 90 day consultation process which expired on August 3.

Since it has not reached a revised agreement with the

seller, Peabody intends to provide an update on August 19, it

said at its results.

"We believe a last minute deal has become less likely, and

our base case now is that this goes to arbitration," Jefferies

said in a note on Monday. The broker estimates a $316 million

value hit if the Moranbah North mine is able to be ramped back

to full capacity within three months from Sept 1.

Anglo says the event does not qualify as significant since

damages and downtime are likely to be limited and CEO Duncan

Wanblad has said next steps were up to Peabody.

Part of the standoff is because it is unclear when the mine

will be able to restart while the state regulator assesses its

safety. The regulator did not provide a timeline when contacted

by Reuters but said the mine was undergoing a "staged approach"

to reentry as it prioritised worker safety.

For Anglo, any arbitration would push back its restructure,

and may raise concerns around mine management and choice of

buyer.

Strong interest from previous bidders is expected and Anglo

is prepared to rerun the process, a source familiar with the

matter told Reuters. Anglo did not immediately reply to a

request for comment.

For Peabody, ending the deal would ease the pressure of

looming repayments to a $2 billion dollar bridge loan due from

late November. Peabody posted a second quarter loss as coal

prices fell by a third from a year earlier. Peabody and Anglo

did not immediately comment outside office hours.