Anglo American chief executive Mark Cutifani is mulling over the company’s exit from its South African thermal operations.
This will likely be done through a demerger in two to three years’ time and also include its Cerrejón operation in Colombia, which mine ownership is shared with BHP and Glencore.
Cutifani said the company had reduced its thermal coal footprint by 55 per cent and was well on the way to achieve its exit target.
The chief executive expects the South African exit to take place much more quickly than its departure from Cerrejón.
“…We are also being very respectful of our two partners in terms of our processes. We maintain a dialogue,” Cutifani, speaking in Anglo American’s 2020 interim results conference call, said.
“And at some point in the next two to three years, I think we will be gone from there as well. Again, I don’t want to be or can’t be too hard on the timing of that, because again, we’ve got two other partners in that asset and we’re making sure that we deal with that the right way.”
Cutifani said the company’s Crop Nutrients fertiliser business in the United Kingdom was “a pretty good swap” for its South African thermal coal business as the former had twice the potential to contribute to the business.
Anglo American’s thermal coal portfolio represents just five per cent of its profit (earnings before interest, tax, depreciation and amortisation) across the business and is expected to reduce over time due to an estimated price decline.
“… From our point of view, our cleaner, greener world products will make up 65 per cent of our portfolio over the next few years,” Cutifani said.
“Even with our contribution in bulks, we will have high quality, high efficient iron ore and met coal, which will make again another efficiency and cleaner contribution to the making of steel over the longer term.”