Anglo American through its 73%-held subsidiary Anglo American Inyosi Coal (Proprietary) Ltd, has sold the New Largo thermal coal project and Old New Largo closed coal mine in South Africa to New Largo Coal Proprietary Ltd, which is owned by Seriti Resources Proprietary Ltd and Coalzar Proprietary Ltd, two companies majority owned and controlled by historically disadvantaged South Africans (HDSAs), and the Industrial Development Corporation SOC Ltd (the IDC).
The consideration payable for New Largo is ZAR850 million (approximately US$71 million). The consideration will be payable in cash by New Largo Coal Proprietary Ltd upon closing of the transaction.
New Largo is located in South Africa and its principal asset is the approximately 585 million t coal resource, with the related Mining Right, that is well-positioned to supply Eskom's new Kusile power plant.
Norman Mbazima, Deputy Chairman of Anglo American South Africa, said: "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. The sale delivers on our long-standing strategy to exit our Eskom-tied coal assets and marks another Anglo American led step-change in the sustainable transformation of the South African mining industry, supporting both Eskom and the country's transformation objectives."
The transaction is subject to conditions precedent customary for a transaction of this nature, including regulatory approvals in South Africa. The transaction is expected to close in 2H18.