Anglo American has announced the disposal of its 33.3% minority stake in the Jellinbah Group for $1.1 billion (around R19.3bn) as it repositions its portfolio.
This transaction involves two major steelmaking coal mines in Australia—the Jellinbah East and Lake Vermont—reflecting the diversified resources firm’s strategy to focus on more lucrative commodities such as copper and premium iron ore.
The sale is set to take place with Zashvin Pty Limited, who currently holds an equal stake in the joint venture, alongside Marubeni Corporation.
Marubeni, is the other shareholder in the two Australian steelmaking coal mines. Anglo American was not involved in the production and marketing of the steelmaking coal produced from the Jellinbah-controlled mines.
This strategic divestment follows Anglo American’s plan to streamline operations, which now include systematic exits from its platinum group metals, diamonds, and steelmaking coal sectors.
Duncan Wanblad, Chief Executive of Anglo American, expressed confidence in this transaction.
“We are delighted to have agreed terms with our JV partner, Zashvin, for the sale of our minority interest in Jellinbah. The cash proceeds of A$1.6 billion reflect the exceptional quality of the Jellinbah business,” Wanblad said.
Anglo American expects this transaction, which is still subject to customary regulatory approvals, to be completed in the second quarter of next year.
In the third quarter to the end of September, Anglo American’s steelmaking coal production decreased by 6%, muzzled by the cessation of mining at Grosvenor following the underground fire in June 2024.
Excluding the impacts of the Grosvenor fire incident, the company’s steelmaking coal production increased by 3%, reflecting higher production from the Dawson open-cut operation and Moranbah longwall operation, it said recently.
James Xu from Zashvin remarked on the strong partnerships that have underpinned Jellinbah’s success.
“We’re appreciative of Anglo American’s significant role in this journey and we value its dedication to making this transaction smooth and efficient,” Xu said.
Xu added that Zashvin’s additional investment in the two Australian coal mines “not only reflects our confidence in Queensland’s coal industry but also our commitment to supporting the central Queensland” community.
Anglo American remains committed to advancing the disposal of its steelmaking coal assets in Australia, which Wanblad indicated is “now at an advanced stage.”
This restructuring effort aims to pivot towards a more cash-generative portfolio that promises higher margins and resilience through market fluctuations.
With ambitions to ramp up copper production to over one million tonnes by the early 2030s, the company’s future direction indicates a strategic alignment with sectors offering growth opportunities and sustainability.
BUSINESS REPORT