Anglo sells off stake in Australian coal unit for £0.8bn

4th Nov 2024 07:04

(Sharecast News) - Anglo American has announced the A$1.6bn (£0.8bn) sale of a stake in the Jellinbah joint venture in Australia as part of its strategy to exit the steelmaking coal industry.

The mining group, which in the summer revealed plans to spin off or exit several businesses including its diamond, platinum and coking coal operations, said on Monday that it has offloaded its 33.3% interest in Jellinbah, which owns a 70% stake in the Jellinbah East and Lake Vermont steelmaking coal mines, to project partner Zashvin.

Anglo isn't the operator at the Jellinbah mines, nor does it market any production volumes from the sites, but still earned $779m in revenues from its one-third stake in 2023, along with a $373m positive benefit to underlying EBITDA.

Chief executive Duncan Wanblad said he was "delighted" by the deal, with the transaction value reflecting the "exceptional quality of the Jellinbah business".

"Our process to sell the rest of our steelmaking coal business - being the portfolio of steelmaking coal mines that we operate in Australia - is now at an advanced stage and we are on track to agree terms in the coming months," he said.

Wanblad added that the rest of the simplification plan at Anglo to focus on "future-enabling products" like copper, premium iron ore and crop nutrients assets is making "excellent progress".

"This highly cash generative and much higher margin portfolio will offer greater resilience through cycles and the benefit of significant high quality and well sequenced growth options, including a clear path to increase annual copper production to more than one million tonnes by the early 2030s."