Coal news and updates

Anglo American is hopeful of concluding the sale of its Australian coal mines within weeks with BHP Billiton among the leading bidders, said people who have been close to the sales process.

A sale of the Moranbah and Grosvenor mines would be a key component of Anglo’s debt reduction plans as it tries to persuade investors that it can stave off the consequences of lower commodity prices.

The efforts by Anglo to sell the mines come in spite of global pressure on coal producers because of weak prices and concerns over the fuel’s role in increasing carbon emissions.

The two mines produce coking coal for use in steelmaking, which is seen by many analysts as a more robust part of the market compared with demand for thermal coal for power stations.

Anglo stepped up its asset sale plans in February. It has sold a trio of smaller Australian coal mines in recent months, while it also sold niobium and phosphate deposits in Brazil for $1.5bn in April, as part of plans for between $3bn and $4bn of asset disposals this year.

Glencore, the commodities group, was among the groups to consider a bid for the Anglo coal assets but people aware of the sale plans said the Switzerland-based group was no longer in the process.

Apollo, the private equity group, has also been considering a bid for the assets.

BHP, the world’s largest mining group by market capitalisation, is seen as a potential buyer because of the synergies it could achieve with one of its own Australian coal businesses. BHP has a joint venture with Mitsubishi of Japan that owns several nearby mines in the same Bowen Basin coal district of Queensland.

Source: FT