Anglo-American to demerge SA coal assets

dlk001

Executive Member
Joined
Jul 29, 2005
Messages
7,301
Anglo-American is to transfer its South African thermal coal assets into a new company, in a move to exit the polluting resource amid growing investor pressure.

“As the world transitions towards a low-carbon economy, we must continue to act responsibly,” said Mark Cutifani, Anglo-American’s chief executive. “Our proposed demerger of what are precious natural resources for South Africa allows us to do exactly that.”

Mining companies have been under pressure to divest from coal mines. Rio Tinto sold its last coal mine in 2018 and BHP is also looking to exit its thermal coal business.

Anglo American has agreed to demerge its thermal coal operations in South Africa to a new holding company called Thungela Resources Limited.

The separation deal, which is subject to the approval of Anglo American’s shareholders on May 5, 2021, will be implemented through the transfer of Anglo’s South Africa thermal coal operations to Thungela, the demerger of the Thungela shares to Anglo American shareholders and the primary listing of Thungela’s shares on the Johannesburg Stock Exchange (JSE) and standard listing on the London Stock Exchange (LSE).

Thungela had 16.5 Mt of attributable export production to its name in 2020, with its operations close to an established rail network with secure access to export markets via the Richards Bay Coal Terminal. It has 137 Mt of reserves and 756 Mt of resources, along with seven operations (four open-pit and three underground).

Anglo’s operations, meanwhile, are derived from three wholly owned and operated mines – Goedehoop, Greenside and Khwezela; Zibulo (73% owned, pictured); as well as from Mafube colliery, a 50:50 joint operation. It supplies around 19 Mt/y of export thermal coal from these mines.


 

R13...

Honorary Master
Joined
Aug 4, 2008
Messages
36,047
Could they not find an outright buyer or this is just a way to provr value? They did it with their initial exit out of non core assets like alumnium, paper, etc. It is actually a good gamble. If the value soars then Anglo shareholders score well but can also get burnt if things don't work out.
 

dlk001

Executive Member
Joined
Jul 29, 2005
Messages
7,301
Could they not find an outright buyer or this is just a way to provr value? They did it with their initial exit out of non core assets like alumnium, paper, etc. It is actually a good gamble. If the value soars then Anglo shareholders score well but can also get burnt if things don't work out.

There's little appetite for coal in general and selling at the right price while ticking all other boxes (technical fit, political fit, employee interests) is complicated which is why it has taken nearly 5 yrs to come to this deal.

These are good assets still but are no longer part of Anglo's vision.
 

R13...

Honorary Master
Joined
Aug 4, 2008
Messages
36,047
There's little appetite for coal in general and selling at the right price while ticking all other boxes (technical fit, political fit, employee interests) is complicated which is why it has taken nearly 5 yrs to come to this deal.

These are good assets still but are no longer part of Anglo's vision.
What's their vision? They are keeping met coal. And met coal makes some thermal coal as a byproduct.
 

hexagon

Senior Member
Joined
May 31, 2006
Messages
549
They would likely want to remain attractive from an ESG standpoint (although how free ESG assessment is from corruption is somewhat open to debate). AFAIK, the Anglo coal was very high grade - mostly export and probably destined for steel production. You can make steel without coal from electric arc furnaces, but it needs continuity of supply, which can stretch the capabilities of renewables.
 
Last edited:

dlk001

Executive Member
Joined
Jul 29, 2005
Messages
7,301
What's their vision? They are keeping met coal. And met coal makes some thermal coal as a byproduct.

Vision is

Platinum, Mogalakwena
What's their vision? They are keeping met coal. And met coal makes some thermal coal as a byproduct.

Vision is Platinum, Diamonds and Copper. However, they have made a turnaround and decided to keep Met Coal and Iron Ore while they still make money.

That means in SA

Platinum will be Mogalakwena (open pit and underground)
Diamonds will be Venetia underground

However, they will continue to milk Kumba Iron Ore to extract more money because its a huge cashcow. That is why Kumba Iron Ore is retrenching despite having made massive profits for the last 4 years. i.e. lower cost/ton and increased profits.

Outside SA

Diamonds (Botswana and Canada)
Copper (Chile)
Met Coal (Australia)
Iron Ore (Brazil)
 

Oldfut

Senior Member
Joined
Jan 28, 2018
Messages
599
Vision is

Platinum, Mogalakwena


Vision is Platinum, Diamonds and Copper. However, they have made a turnaround and decided to keep Met Coal and Iron Ore while they still make money.

That means in SA

Platinum will be Mogalakwena (open pit and underground)
Diamonds will be Venetia underground

However, they will continue to milk Kumba Iron Ore to extract more money because its a huge cashcow. That is why Kumba Iron Ore is retrenching despite having made massive profits for the last 4 years. i.e. lower cost/ton and increased profits.

Outside SA

Diamonds (Botswana and Canada)
Copper (Chile)
Met Coal (Australia)
Iron Ore (Brazil)
Thanks; gold as in Anglogold?

Then does this new entity have any link to Seriti and/or it (Seriti) maybe having a few headwinds in its possible coal contracts with Eskom?
 

R13...

Honorary Master
Joined
Aug 4, 2008
Messages
36,047
Thanks; gold as in Anglogold?

Then does this new entity have any link to Seriti and/or it (Seriti) maybe having a few headwinds in its possible coal contracts with Eskom?
I don't think he's said anything about gold in there? Anglo American have been out of Anglogold for years now.

And Seriti is the entity formed on the sale of Anglo's Eskom supplying mines to Seriti Resources. What is left of the coal business is what they have now spun out.
 
Top