in brief in the news By David McKay
MINING
Anglo’s plan to exit thermal coal
The mining giant is considering either a trade sale or return of shares for its export coal business.
The Anglo American Greenside Colliery is situated 15km southwest of Witbank in Mpumalanga.
Photos: miningmx.com | www.angloamerican.com
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nglo American has given itself two to three years to dispense with its South African thermal coal export mines. This is in line with a response to questions at a virtual annual general meeting this year in which Anglo also disclosed that the divestment would be partial; that is, through a demerger with the new company floated on the JSE. However, the intention is to get on with the job in a much shorter timeframe than three years. “Once you’ve made the decision, you’re better off getting on with it and the demerger route was the quickest route from our point of view,” said Mark Cutifani, CEO of Anglo American, in an interview with finweek. According to Cutifani, one benefit of the demerger route is that it cuts down on red tape compared with a trade sale. “You’re handing back a share, so shareholders can make their own decisions about what they want to do with that share. It’s got less government issues, and the government is pleased to see a local listing.” Cutifani is perhaps mindful of the
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route taken by South32, the Australiaheadquartered company, which announced the sale of its SA coal assets in 2018 but has yet to complete the transaction. (It’ll be done by way of a trade sale to Seriti Resources.) Or the 12 months taken to sell his firm’s domestic assets, which was also to Seriti Resources. “That was the main issue: you’ve got at least 12 years life (of assets) so you’ve given the opportunity for that to be successful and at the same time we’re not trying to dictate to the country about what they should do with their natural resources,” Cutifani says. He adds that he’s still open to a trade sale, but the offers would have to be from companies that Anglo could trust would not lead to recrimination later down the line. The last thing Anglo needs is selling to a buyer who’d mismanage the legacy risks and therefore invite criticism from government as well as civil organisations. Having an ESG (environment, social and governance) issue blow up in your face is as damaging to mining companies these days as missing production guidance.
Mark Cutifani CEO of Anglo American
Vuslat Bayoglu Managing director of Menar Holdings
www.fin24.com/finweek
