Anglo American sells coal business to defend itself from takeovers

Anglo American has sold its stake in an Australian steelmaking coal business for £850 million as part of a strategic overhaul to defend itself from takeover bids.
The FTSE 100 miner has offloaded its 33 per cent holding in Jellinbah Group, a joint venture that owns a 70 per cent interest in the Jellinbah East and Lake Vermont steelmaking coal mines in Queensland.
Anglo American’s stake has been bought by Zashvin, an investment company owned by the Brisbane billionaire Sam Chong. Zashvin is an existing 33.3 per cent shareholder in Jellinbah Group alongside Anglo American and the Japanese trading and investment business Marubeni.
Duncan Wanblad, chief executive of Anglo American, said that the deal reflected “the exceptional quality of the Jellinbah business”, which generated revenue of $354 million in the first half of 2024, and underlying earnings before interest, tax, depreciation and amortisation of $153 million. Anglo American’s share price was up 23p, or 0.96 per cent, to £24.19 by late afternoon.
Wanblad said: “Our process to sell the rest of our steelmaking coal business — being the portfolio of steelmaking coal mines that we operate in Australia — is now at an advanced stage and we are on track to agree terms in the coming months.
“We are making excellent progress with our simplification of Anglo American to create an exciting and differentiated investment proposition focused on our world-class copper, premium iron ore and crop nutrients assets — all future-enabling products.”
Anglo American has been restructuring to appease shareholders after seeing off a £39 billion takeover approach from BHP earlier this year. The company also plans to offload its De Beers diamond unit as well as its nickel and platinum assets. In September it started disposing of its interest in its platinum business by selling down its stake from 78.6 per cent to 73.7 per cent.
Analysts at RBC Capital Markets expect Anglo American’s share price to strengthen as it simplifies its assets to create a miner with a 60 per cent exposure to copper.
Copper has become a sought-after resource because it is heavily used for manufacturing the infrastructure and goods required for a shift towards a low-carbon energy system, such as electric vehicles, wind turbines and energy networks.
Mining companies have been trying to increase their exposure to copper by making bids for rivals, such as BHP’s approach for Anglo American, and many have been exiting their coal assets. Anglo American has become a takeover target owing to its copper mines in Peru and Chile, which are capable of producing about 760,000 tonnes of copper annually.
• Supply gap for copper ‘could grow to a third’, trader predicts
BHP sold Blackwater and Daunia, its coking coal businesses, for up to $4.1 billion in April, and Teck Resources, a Canadian mining group, sold its steelmaking coal operations to Glencore for $6.9 billion last year.
James Xu, of Zashvin, said: “Jellinbah’s success has been driven by robust partnerships. We’re appreciative of Anglo American’s significant role in this journey and we value its dedication to making this transaction smooth and efficient. As a family that’s been with Jellinbah since its inception, our increased investment not only reflects our confidence in Queensland’s coal industry but also our commitment to supporting the central Queensland community.”
Anglo’s announcement comes after its shares took a hit last week when BHP’s chairman sought to end speculation about a second bid for its FTSE 100 rival. Ken MacKenzie declared at BHP’s annual meeting that although it had “thought there was an opportunity here to create something unique and special” its executives had moved on. The statement sent Anglo’s shares down by 97½p, or 3.9 per cent, to £23.85½, last Wednesday but RBC’s analysts said on Monday: “A renewed approach from BHP cannot be ruled out.” BHP has been required by takeover rules to walk away from its interest in Anglo for at least six months but it will be permitted to revisit a bid from November 29.