Anglo American announced a $164 million deal to sell its Eskom-tied domestic thermal coal operations in South Africa to a wholly owned subsidiary of Seriti Resources Holdings Pty Ltd, a company majority owned by historically disadvantaged South Africans (HDSAs) and led by a management team with extensive experience of operating and developing large coal mines in South Africa.
The Eskom-tied domestic thermal coal operations consist of the New Vaal, New Denmark, and Kriel collieries, as well as four closed collieries. The Transaction will result in Seriti becoming the second largest provider of thermal coal to Eskom, supplying almost a quarter of Eskom’s current annual coal requirements.
“This transaction forms part of our ongoing commitment to reshape and upgrade our global asset portfolio, recognizing the appropriate value and further demonstrating Anglo American's longstanding support for the development and sustainability of South Africa's mining industry,” Mark Cutifani, chief executive, Anglo American, said.
The transaction is subject to customary conditions, including regulatory approvals in South Africa, as well as Eskom’s consent for the transfer to Seriti of the coal supply agreements which govern the operations’ supply of coal to Eskom. It is expected to close by the end of 2017.