Anglo shareholders give green light to unbundling of SA thermal coal assets

ANGLO American shareholders have given the green light to the proposed unbundling of the company’s South African thermal coal assets, almost a month after the company unveiled the plan.

A total of 94.25 percent of shareholders voted in favour of the demerger of the South African thermal coal assets during an annual general meeting and court meeting held on Wednesday, the company said in a statement yesterday.

Approval by shareholders will set in motion the establishment of the South African thermal coal business as a standalone entity, known as Thungela Resources, which is scheduled to list on the JSE and in London next month.

The demerger – which is subject to conditions, including approval from the competition authorities – comes as investors are putting pressure on mining companies to reduce their exposure to fossil fuels.

Anglo has set an ambitious target of reducing greenhouse gas emissions by 30 percent by 2030.

During a virtual presentation to the investment community, yesterday Thungela chief executive July Ndlovu said the company was a high-quality thermal coal business with 16.5 million tons of attributable export saleable production last year.

Asked whether Thungela would explore consolidation opportunities, Ndlovu said mergers and acquisitions were not on the cards for now.

“As we sit here today, we only got approval yesterday to become a standalone, and we are thankful to our shareholders for doing that. Our priority is to set this as a standalone business, which is sustainable, making sure that we deliver attractive cash flows for our shareholders. Only then do we step back and say what do we do in the future, but that is not a question that we are grappling with as we sit today,” said Ndlovu.

The group said Thungela, whose projects include Greenside and Zibulo Collieries, had attractive infrastructure and was well positioned on an established rail network with secure access to export markets via the Richards Bay Coal Terminal.

Thungela’s head of marketing, Bernard Dalton, said the group was planning to approach Transnet Freight Rail on how to use the rail and port capacity optimally. “A renewal of the Transnet Freight Rail (TFR) contract is one of the priority projects. We have not engaged with TFR yet. We will do that shortly, but it is high on our priority list,” said Dalton.

Anglo American shares closed 0.56 percent lower at R644.37 on the JSE yesterday.