Anglo American has agreed to sell its South African-based thermal coal business for ZAR2.3bn (£310m) as part of its divestment plans in the country.
The miner announced the sale of its Eskom coal operations to a subsidiary of Seriti Resources – a South African company owned by the country’s historically disadvantaged communities.
Anglo American is celebrating the 100th anniversary of its founding in South African this year. The FTSE 100 miner is undergoing a restructuring that will see it divest its coal, iron ore, and manganese assets in South Africa, while retaining its platinum and diamond mines in the country.
The deal, which is subject to regulatory approval, means Seriti will become the second largest thermal coal provider to Eskom.
Anglo chief executive Mark Cutifani said:
This transaction forms part of our ongoing commitment to reshape and upgrade our global asset portfolio, recognising appropriate value and further demonstrating Anglo American’s longstanding support for the development and sustainability of South Africa’s mining industry.
Earlier this year, Mr Cutifani warned South Africa’s government to “stop the rot” in its mining industry through investment-friendly legislation.
The country has been hit by a new wave of political turbulence in recent weeks, following the ousting of a host of senior ministers including finance minister Pravin Gordhan. Fitch became the second major rating agency to junk the country last week.