Anglo American has shortlisted groups led by some of South Africa’s most prominent black businesspeople as bidders for several of its South African coal mines as it focuses on diamonds, platinum and copper, two people familiar with the discussions have said.

Groups selected by Anglo include companies led by Mike Teke, president of South Africa’s Chamber of Mines; Phuthuma Nhleko, chairperson of Phembani Group and head of Africa’s biggest mobile phone company, MTN Group; and Sandile Zungu, executive chairperson of Zungu Investments, according to the people who asked not to be identified because the information is not public. Rand Merchant Bank is involved in the process, they said.

Anglo, founded in Johannesburg in 1917, announced plans in February last year to sell more than half its mines to focus on a smaller group of commodities. The mines under discussion are those that sell coal locally in South Africa, mainly to State-owned power company Eskom Together, the assets – the New Vaal, Kriel and New Denmark mines – account for about half the company’s South African coal production.

Eskom Contracts
The three mines combined produced almost seven-million tons of coal in the third quarter of last year, according to Anglo. While the value of the coal contracts with Eskom varies, they usually average around R500/t ($37.07/t), according to Khulu Phasiwe, a spokesperson at the power utility. That would equate to about $1-billion worth of coal a year from the Anglo assets.

The South African government is pushing companies to boost black involvement in the economy to make up for discrimination during apartheid. Eskom says it wants suppliers to be black-controlled.

Anglo will not comment on potential bidders, owing to confidentiality agreements, company spokesperson Moeketsi Mofokeng said by phone.

“We continue to engage Eskom and government on the process that we’ve embarked on,” he added.

Teke, Zungu and RMB declined to comment. Phembani did not immediately reply to emailed questions.