Pretoria – Anglo American plc announces the sale of its Eskom-tied domestic thermal coal operations in South Africa to a wholly owned subsidiary of Seriti Resources Holdings Proprietary Limited, 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 “Operations”). 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.
The consideration payable for the Operations as at 1 January 2017 is ZAR2.3 billion, approximately US$164 million). Under the terms of the Transaction, the consideration payable will be adjusted for cash flows generated by the Operations between 1 January 2017 and the date on which the transaction is completed in order to determine the final payment to be made by Seriti upon completion.
“We are pleased to have agreed the sale of our Eskom-tied domestic thermal coal operations in South Africa. This transaction forms part of our ongoing commitment to reshape and upgrade our global asset portfolio, recognising appropriate value and further demonstrating Anglo American’s longstanding support for the development and sustainability of South Africa’s mining industry,” says Mark Cutifani, Anglo American Chief Executive Officer.
“We believe that the sale to Seriti supports transformation objectives for the industry as well as the country, while ensuring a sustainable, reliable and cost efficient supply of coal to Eskom,” says Norman Mbazima, Anglo American South Africa Deputy Chairman.
The Transaction is subject to conditions precedent that are customary for a transaction of this nature, 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.