Anglo American plc ("Anglo American" or the "Company") announces the sale, by its 73%-held subsidiary Anglo American Inyosi Coal (Proprietary) Limited, of the New Largo thermal coal project and Old New Largo closed colliery in South Africa (together, "New Largo") to New Largo Coal Proprietary Limited (the "Purchaser"), which is owned by Seriti Resources Proprietary Limited ("Seriti") and Coalzar Proprietary Limited ("Coalzar"), two companies majority owned and controlled by historically disadvantaged South Africans ("HDSAs"), and the Industrial Development Corporation SOC Limited (the "IDC") (the "Transaction").
The consideration payable for New Largo is ZAR850 million (approximately US$71 million). The consideration will be payable in cash by the Purchaser upon closing of the Transaction.
New Largo is located in South Africa and its 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. For further information on the Coal Resource please refer to the Anglo American Ore Reserves and Mineral Resources Report 2016.
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 the second half of 2018.
The Transaction is a small related party transaction under UK Listing Authority ("UKLA") Listing Rule 11, Annex 1, as the IDC, a substantial shareholder in the Company's subsidiary Kumba Iron Ore Limited, is a shareholder in the Purchaser. The Transaction is subject to the requirements of UKLA Listing Rule 11.1.10R, due to aggregation with the related party transaction(1) that a subsidiary of the Company entered into on 14 February 2017 involving the Public Investment Corporation, an associate of the IDC, both of which are ultimately controlled by the Government of South Africa.
(1)The related party transaction refers to the sale of Anglo American Platinum's 85% interest in Union Mine, by its wholly owned subsidiary Rustenburg Platinum Mines Limited, to a subsidiary of Siyanda Resources Proprietary Limited ("Siyanda"). The Public Investment Corporation ("PIC") is a 30% shareholder in Siyanda.
The Public Investment Corporation (PIC) has a 13.7% shareholding in Anglo American plc.
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