Anglo sells Eskom mines for R2.3bn

Anglo American Plc will sell its Eskom-linked thermal coal operations in South Africa for R2.3 billion in line with a strategic overhaul to sharpen its focus on three commodities.

The mines, along with four closed collieries, have a supply agreement with Eskom, under which Eskom pays for their running costs in exchange for guaranteed coal supply at a pre-set price.

Anglo said it will sell the mines – New Vaal, New Denmark and Kriel collieries – to Seriti Resources Holdings, which is led by Mike Teke, president of the Chamber of Mines industry lobby group.

Hit hard by a slump in commodity prices in 2015, Anglo launched an overhaul to slim down its portfolio and focus on diamonds, platinum and copper.

“This transaction forms part of our ongoing commitment to reshape and upgrade our global asset portfolio,” Chief Executive Mark Cutifani said.

Shares in the company rose more than 3% and 1% in Johannesburg and London respectively.

The deal is subject to regulatory approval and consent from Eskom.

Seriti, which is under 79%-owned black ownership, has also expressed interest in buying Anglo’s New Largo project that will supply Eskom’s new Kusile power plant over 47 years, Teke said. “We are interested in building a massive mining company.

If there’s an opportunity and Anglo is selling, we will explore that possibility.” –