Anglo sells New Largo coal project

Norman Mbazima, deputy chairman, Anglo American South Africa

The mining company’s 73%-held subsidiary Anglo American Inyosi Coal Limited is selling the operations to New Largo Coal, which is owned by Seriti Resources and Coalzar, two companies majority owned and controlled by historically disadvantaged South Africans, and the Industrial Development Corporation (IDC).

"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,” says Norman Mbazima, deputy chairman of Anglo American South Africa.

The consideration payable for New Largo (approximately US$71 million). The consideration will be payable in cash by the Purchaser upon closing of the Transaction.

New Largo’s principal asset is the approximately 585Mt coal resource, with the related mining right, that is well-positioned to supply Eskom's new Kusile Power Station.

The Transaction is subject to conditions precedent customary for a transaction of this nature, including regulatory approvals in South Africa. It is expected to close in the second half of 2018.