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Anglo sells remaining stake in Thungela as it divests from coal assets

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ANGLO American has announced that it has sold its remaining shareholding in Thungela Resources in a R1.67 billion deal, which will see the diversified miner divest in the coal mining business.

The group on Friday said it sold a remaining 8 percent stake in Thungela through an accelerated bookbuild.

Thungela shares were sold at R154 per share, representing a 12 percent discount to the closing share price on March 24, 2022, which stood at R175.

Anglo has been slowly disposing of its remaining interest in Thungela since demerging the company in June last year, in efforts to exit from the South African mining operations.

“At the time of the demerger of Thungela to Anglo American’s shareholders, which was completed in June 2021, Anglo American stated its intention to dispose of its remaining interest in Thungela over time and in a responsible manner, subject to market conditions and not within the first six months following the demerger,” the miner said.

Anglo American launched and completed the sale of its remaining shares and no longer holds any shares in Thungela, the company said.

The demerger followed mounting pressure from investors, climate change activists, and regulators for mining houses to limit their exposure to fossil fuels.

Meanwhile, Thungela which is listed in the JSE and London said on Wednesday when it released its results for the year ended December 31, 2021, it had a high level of cash generation since listing and a healthy balance sheet.

The company posted stellar results, flagging a profit of R6.9bn and declaring a massive dividend of R18.

Commenting on the results, Thungela chief executive July Ndlovu said, “Our exceptional performance shows the magnitude of what we have been able to accomplish since demerger.”

Thungela transitioned from a loss-making group with a net debt position to a profitable, highly cash-generative pure-play thermal coal business bolstered by high coal prices.

The company said it would have performed better if it were not for Transnet’s poor rail infrastructure. Transnet, which operates the country’s major ports and a huge railway network, has been plagued by problems over the past year, forcing producers to cut production.

Since Russia invaded Ukraine, coal prices along with that of natural gas and oil, have surged as Europe looks for alternatives to Russian fossil fuels. South Africa still depends on coal to meet the country’s electricity needs.

Thungela shares were down 9 percent to R158.64 in early trade on the JSE on Friday after the announcement.

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