LONDON (Reuters) – Anglo American (JO:) has hired three banks to sell its coal assets, valued by analysts at as much as $5 billion and part of a wider restructuring to counter a push by rival BHP to keep out. Sources close to the matter said this on Tuesday.
Anglo’s CEO Duncan Wanblad said in May that the sale of its five active coal mines, development projects and joint ventures in Australia would start soon, as part of a broader plan to divest less profitable assets and focus on expanding its production after BHP’s failed attempt to take over the company.
However, the miner is still dealing with a fire that started at the Grosvenor mine in Queensland state on June 29, with damage assessment and reopening likely to take several months.
Signaling the next phase of the divestment, Anglo has hired Goldman Sachs (GS), Morgan Stanley (MS) and Centerview Partners – all previously brokers of the company – to assist in the sale of the assets, the two sources said.
Anglo, GS and MS declined to comment. Centerview could not immediately be reached for comment.
Analysts said the fire at the Grosvenor mine was likely to have affected the timing of the sale process and the valuation of the assets. According to Jefferies, the mine accounts for about 30% of the $4.5 billion value the brokerage places on Anglo’s steelmaking business.
Anglo had said in May that its restructuring, which also includes the demerger of its South African platinum assets, the divestment or closure of its nickel assets, and the demerger or sale of diamond unit De Beers, would be well advanced by the end of 2025 .
Metallurgical coal, which hit a record $635 a tonne in March 2022 on concerns about global supplies following Russia’s invasion of Ukraine, was around $250 on Tuesday.
According to the annual report, the Grosvenor mine produced 2.797 million tonnes of metallurgical coal in 2023, accounting for 17% of Anglo’s coal production. By 2024, it expected the mine to produce 3.5 million tons. The company is the world’s third largest exporter of metallurgical coal.
Grosvenor had already been closed for a year in May 2020 after an explosion injured five workers and sparked a government investigation after it repeatedly produced more methane gas than it could remove. Safety measures were subsequently taken and no injuries were reported in June.
