Anglo American is actively exploring options to advance the sale of its coal business following an explosion at its flagship Australian mine. The company is considering selling individual assets or potentially excluding the damaged operation from any deals.
This move is part of Anglo American’s significant restructuring program, announced earlier this year as a strategic response to fend off a takeover bid from larger rival BHP Group. The restructuring includes plans to spin off its platinum unit and either sell or separate diamond miner De Beers. However, the coal sale was prioritized as it was seen as the most feasible part of the restructuring by both the company and its investors.
Anglo American has already received interest in its coal assets. A deal for the coking coal mines in Australia would have shown investors that Anglo’s independent strategy provides better value than BHP’s rejected bid.
The plan encountered a major hurdle on Saturday when a methane explosion triggered a massive fire at Anglo’s Grosvenor coal mine in Queensland. The company anticipates that it will be several months before they can safely re-enter the mine, let alone resume operations.
Despite this setback, Anglo remains determined to continue the sales process due to the significant early interest in the mines, according to sources familiar with the matter. Before the accident, the company planned to initiate the sales process within the next few months, aiming to finalize a deal by the end of the year. Although the exact method of sale was not detailed, current options include selling the coal business excluding Grosvenor or selling the mines individually.
Excluding Grosvenor from the sale would likely reduce the overall sale price. However, Anglo is eager to move forward and show progress, especially after its board unanimously rejected BHP’s approach in May. The regulatory standstill preventing BHP from making a new approach will expire later this year, adding urgency to Anglo’s efforts.
Anglo American’s stock rose by as much as 2.1% in London, reaching 2,447 pence. This followed a slump of up to 4% on Monday after news of the explosion.
In addition to the coal business sale, Anglo is also planning to spin off its majority stake in Anglo American Platinum and exit its ownership of De Beers. The company prefers to wait for a recovery in the diamond market before selling De Beers, as it believes the asset should command a premium price reflecting its status as a trophy asset.
