Anglo American has announced its intention to sell its stake in both the Dawson and Foxleigh coal mines in Queensland.
The sale of the mines is in addition to the already announced sales of the Callide coal mine, also in Queensland, and Anglo’s Dartbrook coal mine in New South Wales.
The move comes after Anglo completed a company-wide asset review aimed at streamlining its coal portfolio and reducing capex.
The boss of Anglo’s coal business Seamus French said the assets for sale were highly attractive and would generate significant interest from potential buyers.
“The four assets included in the sale package represent an impressive resource base of high quality export coal, a long history of benchmark operational performance and good infrastructure access,” French said.
French said that the proceeds from the sales of the mines would be redeployed into strategic focus areas for the business and would contribute to achieving the Anglo group’s long net debt target.
“While we are exploring a sale, we will be disciplined in our approach and if offers we receive are below what we consider fair value, we will not sell these assets; these are good assets,” French said.
“In the meantime, it will be business as usual for the operations.
“We will work through the sales process with the utmost respect for our workforce and will work with them to maintain our safety and productivity focus for the foreseeable future.”
In announcing its full-year financial results last week, Anglo revealed its Australian and Canadian coal assets lost $US1 million in underlying earnings before interest and tax.
The company said the loss was attributable to a 21 per cent decrease in the average quarterly hard coking coal (HCC) benchmark coal price, reducing underlying EBIT by $528 million.
However the company said the impact was offset by productivity improvements that resulted in a 12 per cent increase in metallurgical coal production despite market related production curtailments, significant cost reductions across the Australian operations and favourable Australian dollar exchange-rate movements.
Cost savings across labour, contractors and maintenance, combined with productivity improvements, resulted in the lowest unit costs since 2010, with Australian export FOB cash unit costs reducing by 9 per cent from 2013, in local currency terms.
Anglo chief executive Mark Cutifani said the company would target further gains as the coal market continues to lag.
"In our view, the markets will probably remain very tough for the next one year to two years,” Cutifani said.
"If I could say in a very sombre way, it's a tough market in terms of the work we have done. We have positioned ourselves to continue to improve, but I would say there's still a lot more to be done."