Feb 16, 2016

CQ sell-off planned as Anglo abandons coal assets

CQ sell-off planned as Anglo abandons coal assets

Key Bowen Basin operations including Moranbah North and Grosvenor have been earmarked for sale as mining giant Anglo American backs away from coal.

The company today announced the details of wide-ranging measures aimed at lifting cash flows and reducing net debt, while tightening the group’s focus on a core portfolio of diamond, platinum group metals and copper assets.

It said the group’s coal assets had been identified as non-core and would continue to be actively managed for further performance improvement, with a view to making appropriate divestment decisions over time.

The move comes after Anglo American posted a statutory loss before tax of about $US5.5 billion for 2015.

Coal chief executive officer Seamus French said the company’s coal assets were highly attractive and he believed that they would continue to prosper under new ownership that was well positioned to allocate capital to continue to create value.

“In Australia and Canada we have some of the best metallurgical coal assets and operating teams in the world and the decision to divest over time in no way reflects the quality of the portfolio or the high performing teams who have continuously delivered and performed to world-class standards,” Mr French said.

“We have already announced the intention to sell a number of the Australian assets including Callide, Dartbrook, Dawson, and Foxleigh – some of which already have conditional sales agreed.

“The remaining assets are now being evaluated for buyer interest. We will follow the usual sale process and it is our aim to sell the assets as going concerns to have minimal impact on our workforce.”

The Moranbah North, Grosvenor and Moranbah South assets in the Bowen Basin would be sold as a package, he said, describing it as one of the most significant, high quality metallurgical coal businesses in the world – with a combined resource base of over half a billion tonnes as at 2014.

The new $1.8 billion Grosvenor operation has been producing development coal, with first longwall coal due in July and subsequent ramp-up through the second half of the year.

The sale process for the Moranbah package is under way and is expected to take several months. Early engagement with potential buyers has commenced.

Mr French said Grasstree underground and Capcoal open-cut mines in Middlemount, Queensland would continue to be managed to further improve performance. Anglo American would consider options for exit at the appropriate time.

The Queensland asset sales will result in changes at the Brisbane corporate office.

Mr French said also Anglo American’s New South Wales assets would be included in the divestment program. Alongside the conditional sale of Dartbrook to Australia Pacific Coal announced in December 2015, Drayton and Drayton South will be assessed for sale.

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