Mining and Heavy Industries

Anglo looks to exit Australian coal

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Mining multinational Anglo American could sell all of its Australian coal mines as part of a US$3bn-US$4bn asset offload process, the company announced this week.

Anglo American chief executive Mark Cutifani on Tuesday said the company’s asset moves would continue in 2016, after the company announced $1.3bn in “cost and productivity improvements” already delivered in 2015.

Anglo now plans to reduce its global portfolio to just 16 assets, and said its bul commodities mines would be “managed for cash generation or disposal”.

“The global economic environment and its impact on prices have presented the industry with significant challenges during 2015,” Cutifani said.

“Against the strong headwinds of a 24% decrease in the basket price of our products for the year as a whole, our ongoing intense focus on operational costs and productivity delivered a $1.3 billion EBIT benefit in the year, providing some mitigation.

“Our portfolio transformation is well on track, from [around] 65 assets in 2013 to 45 today,” he continued.

“We completed or announced $2.1 billion of disposals in 2015, including from the sale of our 50% interest in Lafarge Tarmac and the Norte copper assets in Chile, while also agreeing the sale of the Rustenburg platinum operations and two non-core coal assets in Australia, which we expect to complete during 2016.

“We have made significant progress, albeit in an environment that has been deteriorating at a faster pace,” he said.

“Today we are announcing detailed and wide-ranging measures to sustainably improve cash flows and materially reduce net debt, while focusing on our most competitive assets to create the new Anglo American, positioned to deliver robust profitability and cash flows through the cycle.”

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