Anglo American plc is selling New Largo, owned by its 73%-held subsidiary Anglo American Inyosi Coal. The sale also includes the closed coal mine, Old New Largo closed colliery in South Africa. The purchaser New Largo Coal Proprietary Ltd is owned by Seriti Resources Proprietary Ltd and Coalzar Proprietary Ltd, two companies majority owned and controlled by historically disadvantaged South Africans (HDSAs), and the Industrial Development Corp SOC Ltd.
The consideration payable for New Largo is ZAR850 million (approximately $71 million). The consideration will be payable in cash by the Purchaser upon closing of the Transaction.
New Largo’s principal asset is the approximately 585 Mt Coal Resource, with the related Mining Right, that is well-positioned to supply Eskom’s new Kusile power station.
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.