Anglo American Divests US$1.1 Billion Stake in Australian Coal Joint Venture

Anglo American (LSE:AAL,OTCQX:AAUKF) announced a deal to sell its 33.3 percent stake in a joint venture that owns the Jellinbah East and Lake Vermont coal mines in Queensland, Australia, for approximately US$ 1.1 billion.

The stake will be acquired by Zashvin, an Australian electric power generation company that already holds a one-third interest in Jellinbah Group, which in turn operates the two metallurgical coal mines.

Japanese trading giant Marubeni (TSE:8002) also holds a third of the venture.

This sale is expected to be completed by the second quarter of 2025, pending regulatory approvals, marking the latest in a series of divestments by the London-listed mining company as it refocuses on its core assets.

CEO Duncan Wanblad, who took the helm in 2023, has been vocal about Angloâ€s commitment to repositioning the business as a major player in metals and minerals key for energy transition, such as copper and iron ore.

The company has been assessing options for other parts of its portfolio as well, including its diamond, nickel and platinum units, as it moves toward its goal of becoming a more focused, resilient company.

“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,â€� Wanblad said in Angloâ€s press release on Monday (November 4).

Angloâ€s planned exit from metallurgical coal, combined with a sharpened focus on copper, is expected to reduce its carbon footprint and align with global shifts toward lower-emission resources.

The sale comes at a time of heightened speculation over Anglo’s future, following its successful defense against a takeover attempt by the world’s largest miner, BHP (ASX:BHP,LSE:BHP,NYSE:BHP), earlier this year.

BHPâ€s US$49 billion approach was rebuffed by Angloâ€s board and shareholders in May. BHP was reportedly interested in Angloâ€s portfolio of critical minerals, particularly copper, which is seeing increased demand due to the energy transition.

Speaking at the companyâ€s annual meeting in October, BHP CEO Mike Henry suggested that the firm has moved on from its pursuit of Anglo, expressing respect for Angloâ€s plans and commitment to its own growth strategy.

However, BHP later clarified Henryâ€s remarks in a statement, with the company indicating that it may still consider another bid for Anglo after a six month moratorium on acquisition attempts expires on November 29. According to UK takeover regulations, BHP will be permitted to make a renewed offer at that time, should it decide to proceed.

Anglo has steadily advanced its restructuring efforts in other regions as well. In South Africa, it recently reduced its stake in Anglo American Platinum (OTC Pink:AGPPF,JSE:AMS) and is exploring options for its De Beers diamond business.

Angloâ€s goal, as outlined by Wanblad at a Johannesburg mining conference in October, is to position itself as a strong, standalone company. He emphasize that a takeover of the firm won’t be ‘inevitable,’ and reiterated that its restructuring efforts are designed to boost shareholder value and create resilience against potential acquisition bids by competitors.

Anglo Americanâ€s refocus on copper has already translated into growth plans in South America, where it aims to significantly expand production by 2030 through its operations in Chile and Peru. Currently, the company aims to achieve a copper output target of approximately 1 million metric tons per year by the end of the decade.

Shares of Anglo experienced a modest uptick following news of the divestment.

As it steps back from coal, Angloâ€s remaining assets are projected to align with the demands of a global economy increasingly driven by sustainable energy solutions.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.