JOHANNESBURG (miningweekly.com) – LSE- and JSE-listed Anglo American is making further progress with its strategy of disposing of its Eskom-tied coal assets, announcing on Monday that it will sell its New Largo thermal coal assets, which are owned by its 73%-held subsidiary Anglo American Inyosi Coal, to New Largo Coal, for R850-million.
New Largo Coal is a partnership between Seriti Resources, Coalzar and the Industrial Development Corporation (IDC).
Seriti, which is led by well-known mining personality Mike Teke, is 79% black-owned and is set to become Eskom’s largest black controlled coal supplier, delivering about 24-million tonnes of coal a year to the utility’s power stations.
Seriti was, in April 2017, also selected as the preferred bidder to buy Anglo’s Eskom-tied New Vaal, New Denmark and Kriel collieries, as well as four closed collieries, for R2.3-billion.
The company is jointly owned by anchor shareholders including Masimong Group, Thebe Investment Corporation, Zungu Investments and Community Investment Holdings.
Coalzar, meanwhile, was established to represent the interests of its shareholders – Attwood Investments, Elwood Investments, Voranex and Karongi – who are focused on coal mining in the country.
Its management team includes Pius Mokgokong and Lefa Mbethe, who have extensive coal mining experience having been involved in various coal operations in South Africa over the past 15 years.
“I am delighted to announce the sale of New Largo to a new majority black-owned and -managed company. Together, Seriti, Coalzar and the IDC have excellent operating and management capabilities to develop and operate New Largo optimally and sustainably into the future,” Anglo deputy chairperson Norman Mbazima said in a statement.
New Largo’s principal asset is a 585-million-tonne coal resource that is well-positioned to supply Eskom's new Kusile power station, in Mpumalanga.
The transaction is expected to close in the second half of this year.