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Notes to editors:
Thungela Resources will be the listed holding company for the demerged thermal coal operations in South Africa, constituting a strong and attractive business with high quality well-located assets and with access to established export infrastructure. These operations provide a wide range of economic and social benefits for host communities and for South Africa, including significant employment, tax revenues, export earnings, and the provision of many essential community services. Thungela means to “ignite” in isiZulu.
At the 2021 year to date average FOB South Africa market price of $91 per tonne, Thungela is well positioned to capitalise on improved and more stable market fundamentals. In 2018, when the average FOB South Africa price was $98 per tonne and FOB costs were c.$61 per tonne, the assets produced 18.4 million tonnes of export saleable production and generated $558 million of operating cash flow(1). 2020 FOB costs were $51 per export tonne and are expected to be similar in real terms in local currency in 2021. The gross assets of Thungela that are the subject of the proposed demerger were valued at $1,294.5 million as at 31 December 2020. For the year ended 31 December 2020, no profits were attributable to the assets comprising the thermal coal operations in South Africa.
The Thungela Board will comprise Sango Ntsaluba as independent Non-Executive Chair, July Ndlovu as Chief Executive Officer, Deon Smith as Chief Financial Officer, Kholeka Mzondeki as Chair of the Audit Committee, Ben Kodisang and Thero Setiloane as Independent Non-Executive Directors and Seamus French as a Non-Executive Director.
Thungela value proposition:
- A leading South African thermal coal exporter, with 16.5 million tonnes of attributable export saleable production in 2020;
- Well positioned on established rail network with secure access to export markets via the Richards Bay Coal Terminal;
- Low cash-cost assets, well positioned to benefit from a favourable thermal coal market environment;
- Strong suite of life extension and replacement options;
- Robust ESG framework underpins licence to operate;
- Right-sized organisational model focused on safety and business improvement;
- Experienced executive management team led by July Ndlovu as CEO and Deon Smith as CFO;
- Seasoned, highly qualified board of directors led by Sango Ntsaluba as Chair and Kholeka Mzondeki as Chair of the Audit Committee.
(1) $558 million of operating cash flow represents the ZAR7,387 million of net cash (outflow) / inflow from operating activities before income taxes, as reported in 2018, converted to US$ using the 2018 average ZAR:USD FX rate of 13.25.
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As a responsible producer of diamonds (through De Beers), copper, platinum group metals, the steelmaking ingredients of iron ore and metallurgical coal, and nickel – with crop nutrients in development and thermal coal operations planned for divestment – we are committed to being carbon neutral across our operations by 2040. We work together with our business partners and diverse stakeholders to unlock sustainable value from precious natural resources for the benefit of the communities and countries in which we operate, for society as a whole, and for our shareholders. Anglo American is re-imagining mining to improve people’s lives.
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