You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Anglo CEO expects investor support for plan to keep ‘met’ coal

‘We are playing the long game.’
Mark Cutifani, chief executive officer of Anglo American. Image: Jason Alden/Bloomberg

Anglo American, which divested its thermal coal mines this year after pressure from investors, plans to retain its steelmaking coal portfolio as it is confident that they will not press for an early exit, the mining group’s chief executive said.

Anglo spun out its South African thermal coal operations and sold its stake in a Colombian mine to Glencore after shareholder calls to ditch the more polluting fossil fuel to meet emissions targets.

Moneyweb Insider Gold

Join heated discussions with the Moneyweb community, and get full access to our market indicators and data tools while supporting quality journalism.

R63/month or R630/year

SUBSCRIBE NOW

You can cancel at any time.

Read: Anglo American to exit coal business in SA

However, the price of thermal coal, which is burned for steam to produce electricity, rose as high as $280 a tonne in the second half of 2021 from as low as $57 in 2020, generating strong returns for the new owners.

“For us it (thermal coal) created disincentives … yes the Ebitda will be a bit lower this year, but … we are playing the long game,” boss Mark Cutifani said in an interview for the upcoming Reuters Next conference on December 1-3.

Thermal coal, a relatively small part of Anglo’s copper to platinum, nickel and diamond portfolio, had deterred some large investors from owning its shares, Cutifani said.

Anglo also produces metallurgical, known as ‘met’, coal and iron ore, which are key ingredients in steelmaking.

Emissions from steelmaking account for up to 9% of the global total and producers are pushing to develop technology to meet global climate commitments.

“The conversation around met coal has become a lot more mature and we are arguing that we think we are the best holders of those assets for the next 15 years at least and that argument seems to be resonating better with shareholders,” he added.

The coking coal mines owned by Anglo have a relatively short life until the 2040s.

Some shareholders are warming to the idea of holding stocks in coal companies that pledge to run down mines responsibly rather than selling them.

“We are looking at sustainability and you don’t want to pull out of an investment and destroy livelihoods and communities,” Mduduzi Bhulose, portfolio manager at South Africa’s Public Investment Corporation (PIC), said.

PIC is Anglo’s largest shareholder with a 6.9% holding, according to Refinitiv data.

“In the event that they decide to get out of any other metal, the expectation is that they do it in a responsible manner and Anglo has over time shown that they can do that,” PIC’s Bhulose added.

VIDEOS

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

SEARCH COMPANIES
Enter company name or share code:

ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products Nov 2021 5.00%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing Nov 2021 5.50%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. Dec 2021 3.75%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) Dec 2021 7.00%
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: