LONDON (Reuters) – Anglo American (JO:) has hired three banks to sell its steelmaking coal assets, which analysts value at up to $5 billion and is part of a broader restructuring to fend off an approach from rival BHP, two sources familiar with the matter said on Tuesday.
Anglo Chief Executive Duncan Wanblad said in May that the sale of its five operating coal mines, development projects and joint ventures in Australia would soon begin, as part of a broader plan to offload less profitable assets and focus on expanding output after BHP's failed attempt to take over the company.
However, the miner is still battling a fire that broke out at its Grosvenor mine in Queensland state on June 29, and damage assessment and reopening are likely to take several months.
As a sign of the next phase of the divestment, Anglo has hired Goldman Sachs (GS), Morgan Stanley (MS) and Centerview Partners, all of them former brokers for the company, to help with the sale of the assets, the two sources said.
Anglo, GS and MS declined to comment. Centerview was not immediately available for comment.
Analysts said the Grosvenor mine fire was likely to have affected the timing of the sale process and the valuation of the assets. According to Jefferies, the mine accounts for about 30% of the $4.5 billion value the brokerage attributes to Anglo's steelmaking coal business.
Anglo had said in May that the restructuring, which also includes spinning off its South African platinum assets, divesting or closing its nickel assets and spinning off or selling its De Beers diamond unit, would be well advanced by the end of 2025.
Metallurgical coal, which hit a record high of $635 a tonne in March 2022 amid concerns about global supplies following Russia's invasion of Ukraine, was trading around $250 a tonne on Tuesday.
The Grosvenor mine produced 2.797 million tonnes of metallurgical coal in 2023, accounting for 17% of Anglo's coal output, according to its annual report. In 2024, it expected the mine to produce 3.5 million tonnes. The company is the world's third-largest exporter of metallurgical coal.
Grosvenor had already been closed for a year in May 2020 after an explosion injured five workers and triggered a government investigation, as it repeatedly produced more methane gas than it could remove. Safety measures were put in place and no injuries were reported in June.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);