BusinessTech Africa has discovered that Thungela Resources has announced that it has acquired a R4.1 billion majority stake in the Ensham coal mine.
The acquisition in Australia sees the coal miner moving towards diversifying out of the South African market.
The mining giant confirmed that the purchase consideration of AUD 340 million (R4.1 billion) was attractive for a controlling stake in what is a “highly cash-generative thermal coal asset with long-life potential”.
Thungela will acquire an 85% interest in Ensham from Idemitsu Australia and the remaining 15% will continue to be owned by LX International (LXI).
The deal will see Thungela gain operational control of Ensham and, subject to certain existing arrangements, will also have the right to market and sell its proportional share of the coal produced by the Ensham coal mine.
The highly publicised deal comes 20 months after Thungela, South Africa’s largest export coal miner, was spun out of Anglo American.
“This will provide Thungela with access to the Japanese and other Asian markets where demand remains strong” and will “better balance the group’s price exposure by providing access to the strong Newcastle export coal price, complementing the group’s existing exposure to the Richards Bay benchmark coal price”, the mining company said in a statement per News24.
“This acquisition delivers on our strategy to pursue geographic diversification through a commodity we understand and in which we have a right to win,” said Thungela CEO July Ndlovu.
“Given the similarity in operating methodology between Ensham and our South African underground operations, we can leverage our core skills to create value.”
The CEO stated that the transaction would create resilience for Thungela, mitigating its exposure to a single country, South Africa.
“Thungela is pleased to be entering Australia, a leading mining geography with a successful track record of thermal and metallurgical coal production and “reliable, well-established port and rail facilities”, he said
Meanwhile, BTA previously reported that the South African coal exporter has officially agreed with its black economic empowerment partner Inyosi Coal.
The partnership is all about buying a 27% interest in Anglo-American Inyosi Coal (AAIC) which is under Inyosi’s ownership in exchange for shares in Thungela.
