Anglo puts halt to sales of assets

Anglo American would not sell any more assets in SA after closing the deal for the Union platinum mine and the final Eskom-linked coal project, said Anglo SA’s deputy chairman Norman Mbazima. He said that the company would facilitate a power company’s entrance into SA.

Anglo American will not sell any more assets in SA after closing the deal for the Union platinum mine and the final Eskom-linked coal project, said Anglo SA’s deputy chairman Norman Mbazima. He said the firm would facilitate a power company’s entrance into SA.

Anglo American embarked on a strategy of asset sales across the group’s varied portfolio of minerals in late 2015 when it tackled $13bn of debt while commodity prices were weak. Since then, commodity prices have recovered and the diversified miner’s balance sheet is far healthier, allowing it to step back from a big divestment programme in SA that potentially included its subsidiary Kumba Iron Ore, manganese and export thermal coal.

Anglo has remained steadfast in its exit from mines that supply state power utility Eskom, which has insisted its coal supplies come from companies that have 51% black ownership, something the London- and Johannesburg-listed company refused to countenance because it would be a minority partner in the mines it managed.

“We are not sellers of our thermal coal at all. That is simply not on the table,” Mbazima said on the sidelines of the African Mining Indaba in Cape Town.

“There’s not much more left in our restructuring. We are happy with what we have in iron, manganese, coal, PGMs [platinum group metals] and diamonds,” said Mbazima, who has been given the task by CE Mark Cutifani of restructuring the South African portfolio.

“There will be some tinkering, but not big pieces of things. We want to make sure all our businesses operate more efficiently and in that there’s more to be done,” he said. “That’s the mode we are in right now.”

Anglo has, however, dusted off a plan dating back to about 2008 when SA was in the depths of an electricity supply crisis because Eskom could not keep pace with demand.

The plan entailed building a power plant to burn discarded coal to supply its platinum business, keeping its mines, concentrators, smelters and refineries working and less reliant on grid power. After going quiet for a number of years, the plan is again receiving attention from Anglo SA.

“We will not be investing in a power station, but we will help facilitate one. It will be our coal,” Mbazima said, declining to give more details.

Anglo was also investigating a solar energy project in the Northern Cape, for which it would provide the land.

“We will pick who investors will be,” he said.