Cape Town – Anglo American said on Monday it had sold its Eskom-tied domestic thermal coal operations to a company majority owned by historically disadvantaged South Africans for around R2.3 billion.
The sale of the New Vaal, New Denmark and Kriel collieries and four closed collieries will result in Seriti Resources Holdings becoming the second largest provider of thermal coal to Eskom, supplying almost a quarter of Eskom’s annual coal requirements.
Anglo said Seriti was led by a management team with extensive experience of operating and developing large coal mines in South Africa.
Mark Cutifani, Anglo American chief executive, said the deal formed part of the company’s “ongoing commitment to reshape and upgrade our global asset portfolio, recognising appropriate value and further demonstrating Anglo American's longstanding support for the development and sustainability of South Africa's mining industry”.
Norman Mbazima, Anglo’s deputy chairman, said: “We believe that the sale to Seriti supports transformation objectives for the industry as well as the country, while ensuring a sustainable, reliable and cost efficient supply of coal to Eskom”.
Mike Teke, Seriti's chief executive, said the transaction was a significant step towards the company’s vision of becoming “a black-controlled, broad-based South African mining champion, and a coal player of significant size and scale”.
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“Our structure brings together an experienced team capable of operating and developing large scale thermal coal assets and provides a unique mining opportunity for black women,” he added.
The transaction is subject to conditions, including regulatory approvals and Eskom’s consent for the transfer of coal supply agreements.
It is expected to close by the end of the year, and the final price will take into account cash flows generated between January 1 and the date of completion.