ANGLO American said on Wednesday it had completed the sale of its 33.3% stake in Jellinbah Group which controls the Jellinbah East and Lake Vermont metallurgical coal mines in Australia.
The properties were sold to Zashvin Pty Ltd which paid a total of A$1.6bn (about US$1bn), now settled with Anglo ahead of its original schedule of the second quarter. Zashvin was an existing 33.33% shareholder in Jellinbah, alongside Anglo American and Marubeni.
Completion of the deal ahead of time spells good news for Duncan Wanblad, CEO of Anglo American who is hoping to this year complete the lionshare of a restructuring. Among the terms of the restructure, unveiled in May last year, is the sale of Anglo’s metallurgical coal mines, the sale of De Beers, and the unbundling of its stake in Anglo American Platinum (Amplats).
Said Wanblad: “We are pleased to complete this first step in the divestment of our steelmaking coal portfolio, realising $1bn of cash proceeds sooner than expected, further strengthening our balance sheet”.
He added that the group had “made good progress” selling the balance of its steelmaking coal assets in Australia for an additional $3.8bn. This is a deal announced in November in which Peabody Energy will buy the balance of Anglo’s 15 to 17 million tons a year portfolio including the Grosvenor mine and Moranbah North joint venture.
“We have moved at pace to simplify Anglo American to create an exciting and differentiated investment proposition focused on our world-class copper, premium iron ore and crop nutrients businesses,” said Wanblad.
News of Anglo’s progress follows a report earlier this week that BHP – which bid £39bn for Anglo last year – had cooled on renewing its takeover efforts.
According to the Financial Times, the rationale for an offer had diminished, especially as Anglo was in the throes of restructuring. “On the face of it, if BHP were bidding what they thought was fair value, it is difficult to see why they would bid more now,” George Cheveley, fund manager at Ninety One, told the newspaper.
“It will be a different company after those restructuring changes. I feel there is already a bid premium in the shares today,” said Ben Davis, an analyst at RBC of Anglo American’s share price in the first three weeks of the year. Shares in Anglo subsequently fell 4.5%.
With the completion of the metallurgical coal mine sales on the horizon, Anglo’s next stop will be the demerger of Amplats. Analysts say this may be completed as soon as April.
Anglo owns about 66.7% in Amplats following two bookbuilds last year. Intended to minimise the flowback of shares when the demerger occurs, the bookbuilds also raised a total of R16.8bn in cash for Anglo.
In July, Anglo announced it had sold two royalty streams held through its 85% owned De Beers to Sydney-headquartered Taurus Funds Management for $195m.
