Global mining company Anglo American announced today plans to spin off its thermal coal operations in South Africa, marking a step towards the company’s plans transition out of thermal coal.
Thermal coal is the highest carbon emitting source of energy in the global fuel mix, yet it makes up nearly 40% of the world’s energy supply. Anglo American and other producers have faced increasing pressures from investors, banks and environmental organizations to advance the transition to cleaner energy sources and reduce reliance on thermal coal.
Anglo American has significantly reduced its thermal coal production over recent years, and has signaled plans to exit thermal coal over the next 2-3 years. The South African operations represent the bulk of the company’s current thermal coal assets, with only the company’s 1/3 holding in the Cerrejón mine remaining after the South African spinoff.
Mark Cutifani, Chief Executive of Anglo American, said:
“Anglo American has been pursuing a responsible transition away from thermal coal for a number of years now. As the world transitions towards a low carbon economy, we must continue to act responsibly – bringing our employees, shareholders, host communities, host governments and customers along with us. Our proposed demerger of what are precious natural resources for South Africa, allows us to do exactly that.”
The company said that the separation will be implemented through the transferring the South African operations to a new holding company, Thungela Resources Limited, demerging Thungela to Anglo American shareholders, and listing Thungela shares on the Johannesburg Stock Exchange and the London Stock Exchange. The company will seek shareholder approval for the transaction at its May 5 AGM, with the demerger expected to be effective in June.