ANGLO American CEO Mark Cutifani said the group had received “90% good feedback” following the demerger of its South African thermal coal assets.
“One or two are saying: ‘aah, you’re ducking, you’re waving’, and we’ve seen one or two silly reports out there, but most of them understand why we had to do what we did and they’re very supportive,” said Cutifani.
Research company, Boatman Capital, published a report prior to the listing of Thungela Resources, the vehicle for the demerged coal assets, saying Anglo had understated the company’s rehabilitation charges.
“The demerger allows Anglo to dump enormous environmental costs onto a much less well capitalised company,” said Boatman Capital. It said Anglo was guilty of ‘green-washing’. It added that Anglo had also overstated the average long-term coal price.
“The only thing I thought was rather opportunistic and negative was the Boatman Report,” Cutifani said. “If costs are higher and the price is lower, the value is much lower … you can say that about 95% of the world’s mining projects, quite frankly.
“I could have written that report on Saturday morning before breakfast. But you just let that one go. It’s one of those conversations,” he said.
Thungela Resources had a rocky debut on the London Stock Exchange opening at £1.18/share, somewhat lower than the £2.30-£4.90/share valuation range forecast in a report by Liberum Capital earlier this month.
Since then, however, the share is about £1.54/share, about 30% higher since its June 7 listing. In Johannesburg, it’s trading at R30.57/share giving the company a market value of R4.2bn. Cutifani said the firm’s debut was as he expected.
“I thought it was what I’d expected it to be,” he said.
“We knew it would be a volatile week because you’ve got people who maybe can’t hold it so they’re not going to trade, but I think July [Ndlovu, Thungela CEO], and the guys have done a good job to be fair. I think they’ve really done a good job.”
Anglo will inject R2.5bn into Thungela and said it would also continue to provide financial support to the company until end-2022 in the event rand-denominated thermal coal prices fell beneath a certain threshold.
Anglo American produced 16.5 million tons from its South African coal assets during its 2020 financial year, a 7% year-on-year reduction, producing a $15m underlying EBITDA loss, and taking EBITDA losses over two years to $20m.
