Anglo American Plc outlined plans to separate its South African coal mines into a new business, hastening its retreat from mining thermal coal.
Anglo has been plotting an exit from the most-polluting fuel for more than a year and has always said separating its South African business was the most likely outcome. Anglo will still own a coal mine in Colombia that it’s also planning to sell and coking coal mines in Australia, used to make steel rather than burned for power.
The new business will be called Thungela Resources Ltd., the company said in a statement. Existing shareholders in Anglo will be handed stock in the new company that will be listed in both Johannesburg and London. Thungela is expected to start trading on June 7.
The world’s biggest miners have been looking to exit thermal coal mining as more and more investors say they don’t want exposure to the fuel. Anglo has already dramatically reduced the amount of thermal coal it produces in recent years, cutting output by more than half.
Rio Tinto Group sold its last coal mine in 2018 and BHP Group is also in the process of exiting the business. That would leave Glencore Plc, the world’s biggest thermal coal shipper, as the last major miner in industry. Glencore has instead committed to run down its assets by 2050 and in doing so become carbon neutral.
While Anglo has now made clear plans for South Africa, getting out of Colombia is more difficult. The company owns the Cerrejon mine in partnership with Glencore and BHP. The operation predominantly ships to Europe, where the coal market has been hit hard by cheap natural gas prices, potentially limiting the pool of interested buyers.
©2021 Bloomberg L.P.