Anglo American (LON:AAL) has inked a deal to sell its New Largo thermal coal project in South Africa, the blue-chip miner has said. The move comes as the group looks to focus on a limited number of assets, including copper, platinum and diamonds.
Anglo American’s share price has jumped in today’s session, having gained 1.27 percent to 1,756.60p as of 10:15 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing at 7,665.00 points, flat in percentage terms. The company’s shares have added more than 28 percent to their value over the past year, as compared with about a seven-percent rise in the Footsie.
South African coal asset sale
Anglo American announced in a statement this morning that it had agreed the sale the New Largo thermal coal project and Old New Largo closed colliery in South Africa to a group owned by Seriti Resources and Coalzar, two companies, majority owned and controlled by historically disadvantaged South Africans and the Industrial Development Corporation.
The consideration payable is about ZAR850 million (approximately $71 million) in cash. The transaction is expected to complete in the second half of the year, subject to customary closing conditions, including regulatory approvals in South Africa.
Analysts weigh in on deal
Reuters quoted Paul Gait, analyst at Bernstein, as saying that he liked the deal, carried out in a supportive coal price environment.
It was a “a tail asset that does not form part of the Anglo investment case for most shareholders,” he pointed out.
The sale comes after last week, Anglo American delivered a rise in overall output for 2017, helped by strong performance in its diamonds business. The group’s copper production, however, stagnated.