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Anglo American has agreed to sell its stake in an Australian coal mining joint venture for AS$1.6bn (US$1.1bn) as chief executive Duncan Wanblad pushes ahead with radical plans to streamline the business.
The London-listed mining company will sell its 33.3 per cent stake in Jellinbah Group to Zashvin, the Australian power generation operator that already owns a third of the venture alongside Marubeni Corporation, the Japanese trading and investment business.
The deal is expected to be completed in the second quarter of 2025.
Jellinbah Group owns a 70 per cent interest in two metallurgical coal mines in Queensland, Australia: Jellinbah East and Lake Vermont.
Wanblad has embarked on a big restructuring of Anglo, which was put in place as the company defended itself from rival BHP’s £49bn takeover bid this year. “We are making excellent progress in our simplification,” Wanblad said.
He added that the company was “on track to agree terms in the coming months” for the sale of the rest of its metallurgical coal business, comprised of mines in Australia.
“This is a good first step and the valuation looks reasonable,” said George Cheveley, portfolio manager at investment group Ninety One.
“It shows that progress is being made by Anglo American and demonstrates that there is good appetite for their coal assets as they continue to restructure the company.”
Having rebuffed BHP’s offer in May, Wanblad is now under pressure to show that his strategy to streamline Anglo can work.
He plans to offload its trophy De Beers diamond arm, as well as its coal, nickel and platinum units, leaving the business focused on copper and iron ore — earning about 60 per cent of its revenue from copper.
It sold off about 5 per cent of its platinum business Anglo American Platinum in September, cutting its holding from 78.6 per cent to 73.7 per cent.
Speaking at the Joburg Indaba mining conference in October, Wanblad said the restructuring would make Anglo a “very viable, standalone company”, rebuffing suggestions that its copper focus would make it vulnerable to suitors.
However, speculation continues about whether BHP will return to make another bid. Under UK takeover regulations, it is allowed to make a fresh approach after a six-month period that ends on November 29.
Mike Henry, BHP’s chief executive, and Catherine Raw, its chief development officer who is also in charge of mergers and acquisitions, met government officials in South Africa last month, the Financial Times has reported.
“The consensus view is that they are coming back, if they can figure it out,” one banker told the FT at the time.
However, BHP’s chair Ken MacKenzie told shareholders at its annual meeting at the end of October that BHP had “moved on”.
“We made an approach to Anglo American earlier this year . . . We thought there was an opportunity here to create something unique and special, a bit of a sort of a one plus one equals three opportunity,” he said, according to Reuters.
“Unfortunately, Anglo American shareholders had a different view, and they thought there was more value in the plan that their management wanted to execute. And so they moved on. And quite frankly, so have we.”
However, BHP later issued a statement following MacKenzie’s comments, saying the UK Takeover Panel Executive has confirmed that they will “not be treated as a statement of intention not to make an offer in respect of Anglo American” under takeover rules.
Additional reporting by Emma Dunkley in London
