Anglo American considers selling more coal mines

January 26, 2015

Anglo American will consider selling two more coal mines, Dawson and Foxleigh, in Australia, Bloomberg reported.

The coal projects, both in northeastern Queensland, could be put on the block along with its Callide and Dartbrook coal projects up for sale in December.

Anglo American is seeking to sell stakes in or exit South African and Australian energy-coal operations that supply domestic markets as part of a review of assets designed to bolster profitability, Chief Executive Officer Mark Cutifani said last in December. Prices of thermal coal, used to generate electricity, have tumbled more than half since 2011 on supply additions and slowing demand in China, the biggest consumer.

The company is also seeking buyers for four platinum mines in South Africa as well as three copper mines and a smelter in Chile. The South American assets are valued at $1 billion, people familiar with the matter said Oct. 7.

The Dawson mine produces coal for power stations as well as coking coal used in steelmaking. The Foxleigh mine also produces steelmaking coal.

“There is a review of the Australian coal assets but the outcome is yet to be determined,” Jacqui Strambi, a spokeswoman for Anglo American in Brisbane told Bloomberg.

The Financial Times reported earlier that the company is considering a sale of the mines, citing unidentified people.

Anglo’s Australian coal mines produced about 14.7 Mt (16.2 million st) of steelmaking coal and 8.5 Mt (9.4 million st) of energy coal in the first nine months of 2014, the company said in a Oct. 23 production report. Dawson produced 3.2 Mt (3.2 million st) in the period and Foxleigh 1.5 Mt (1.65 million st), it said.

Callide is the company’s second-biggest coal mine in Australia with production of 5.4 Mt (6 million st) in the first nine months of last year. Output from Dartbrook has been suspended since 2007, according to Strambi.

In July the London-based company agreed to sell its 50 percent stake in Lafarge Tarmac to partner Lafarge SA (LG) for at least $1.5 billion.

Related article search: