Anglo American completes demerger of thermal coal operations

As part of its responsible transition away from thermal coal, Anglo American has injected capital of R2.5-billion into the Thungela group and will provide further contingent capital support until the end of 2022, depending on certain coal price thresholds.

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Signage indicating the corporate offices of the Anglo American mining company.

Anglo American Platinum, the world’s largest platinum-mining company with operations in Zimbabwe through Unki Mine, today announced the completion of the demerger of its thermal coal operations in South Africa, now operating under Thungela Resources Limited.

Thungela Resources Limited (“Thungela”) will start trading today through a primary listing on the Johannesburg Stock Exchange under the abbreviated name “Thungela” (Alpha code “TGA”), and a standard listing on the London Stock Exchange (ticker symbol “TGA”).

Anglo has been plotting an exit from thermal coal for more than a year as more investors say they do not want exposure to the fuel.

The scheme of arrangement to implement the demerger was sanctioned by the UK High Court of Justice on 26 May 2021. The completion of the demerger took effect at 8.00 pm (UK time) on 4 June 2021.

Mark Cutifani, Chief Executive of Anglo American said: “We have consistently believed in a responsible transition from thermal coal, being a transition that seeks to balance the needs and expectations of all stakeholders. The demerger of Thungela lives up to that promise by bringing our employees, shareholders, host communities, host government, and our customers along with us.”

“Thungela starts its journey today as a high-quality independent business. We have every confidence that Thungela will be a responsible steward of what are valuable thermal coal resources in South Africa and will continue delivering value for all its stakeholders and for South Africa as a whole,” he added.

July Ndlovu, Chief Executive of Thungela, said: “We are excited to be listing Thungela today. The company plays an important role in providing affordable energy to our customers in the developing world, as well as in South Africa.

“Our business consists of well-established, well-managed assets that produce high-quality thermal coal, with access to world-class export infrastructure. Thungela has an enviable cash cost position and is poised to deliver attractive returns to shareholders.”

On listing, all of Thungela’s issued shares will be held by Anglo American’s shareholders who will each receive one Thungela share for every 10 Anglo American shares that they hold.

As part of its responsible transition away from thermal coal, Anglo American has injected capital of R2.5-billion into the Thungela group and will provide further contingent capital support until the end of 2022, depending on certain coal price thresholds.

Anglo American will also continue to market and sell Thungela’s export products over the next three years, with an additional six-month transitional period, in order to enable the Company to build sufficient marketing capacity of its own.

“We expect our portfolio of assets to be cash generative throughout the life of our mines and well into the next decade, with the option for life extension opportunities. In addition to export markets, we produce thermal coal for domestic consumption in South Africa, which provides us with inherent operational flexibility in response to changes in demand and other external factors,” Ndlovu added.

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