Anglo American to sell its Queensland coal assets, focus on iron, copper

Anglo American wants to urgently prioritise its overseas copper and iron ore mines but offloading its Queensland coal mines won’t be straightforward, says Resources Minister Scott Stewart.

Queensland Resources Minister Scott Stewart has insisted there is a “strong future” for Australia’s steelmaking coal sector. . Picture: Dan Peled / NCA NewsWire

Anglo American (Anglo) must meet “a number of approvals” before it can sell its Queensland steelmaking coal mines, says Resources Minister Scott Stewart.

The century-old London-based company announced this week it was breaking up its assets following BHP’s failed bid of about $60bn to buy the company out.

The to-be divested assets include Anglo’s Moranbah North, Capcoal, Dawson, Aquila and Grosvenor coal mines in Central Queensland’s Bowen Basin.

Anglo chief executive Duncan Wanblad said the urgent changes to the company – which could also include divesting from De Beers (diamonds), nickel, and platinum — would “reset” the company’s balance sheet.

“We already have been receiving strong inbound interest,” Mr Wanblad said.

Anglo American chief executive Duncan Wanblad. Picture: Anglo American

But Mr Stewart said Anglo’s exit from Australian coal take “significant” time.

“Anglo American and any potential buyer must ensure the workers and the communities these mines operate in are prioritised and I’ve already said that to them,” he said.

“There will be a number of approvals that would need to be met before any of these assets could be sold.”

A ‘compelling and decisive’ plan to ditch coal

Anglo American’s website states its “clear, compelling and decisive plan” will “unlock significant value from its portfolio” and boost shareholder returns.

With a global push towards greener energy, copper has become an increasingly profitable commodity and was Anglo American’s second-highest earner behind iron ore, generating $7.36bn in revenue and $1.099bn in underlying earnings over 2022-23, according to its 2023 annual report.

Anglo’s Grosvenor Mine. Picture: Contributed

Whereas Anglo’s steelmaking arm came in fifth, creating $4bn in revenue in the 2022-23 financial year with underlying earnings of $684m.

The company had undertaken “significant work” to convert the size of its Bowen Basin coal mines “in light of lower volumes and increased royalty take by (the) Queensland state”, its 2023 presentation on the London Stock Exchange revealed.

Queensland Resources Minister Scott Stewart has insisted there is a “strong future” for Australia’s steelmaking coal sector. Picture: Dan Peled / NCA NewsWire

Despite the mining giant’s move to preference copper over coal, Mr Stewart said the future for steelmaking coal was “strong”.

“We’re seeing confidence in the industry right now with exploration for coal up more than 40 per cent year on year,” he said.

BHP ‘disappointed’ at lost chance to be world’s biggest copper producer

BHP, which itself divested two Queensland coal mines earlier this year, stated it was “disappointed” Anglo chose not to entertain its revised merger proposal as it “continues to believe that a combination of the two businesses would deliver significant value for all shareholders”.

If it had succeeded, BHP would have become the world’s biggest producer of copper.

Whether it will take another run at Anglo remains to be seen but in any case, Anglo’s intent to leave coal behind has concerned mining communities in the Isaac region west of Mackay, with heightened fears of abandoned towns.

Many residents in the Isaac region, west of Mackay, are largely dependent on coal mines for income. Photo: Zizi Averill

Isaac Regional Council Mayor Kelly Vea Vea said the impacts could not be understated as the towns of Moranbah and Middlemount serviced four of the five Anglo coal mines.

“There is no doubt that workers, families, and businesses across our communities will be unnerved by Anglo’s news,” Ms Vea Vea said.

“This is more than the sale of mining leases.

Isaac Regional Council Mayor Kelly Vea Vea says she is concerned what impact Anglo’s sale will have on local communities.

“There are over 600 homes, community infrastructure such as water supply and social services like childcare and health intertwined with these assets.”

“For us in the Isaac region, we will be looking to the state government to ensure the responsible management of this transfer considers not only the mining leases but the spider web of community and social infrastructure that are attached to these mines.”

5000 coal miners with an unsure future

It is understood the five mines together employ about 5000 workers on top of contractors.

Mining and Energy Union president Mitch Hughes said Anglo’s move was a surprise and would create uncertainty for workers.

“We will be seeking urgent briefings with the company to understand what the process will be from here,” Mr Hughes said.

“Our priority will be protecting our members’ ongoing job security through the sale process, along with ensuring entitlements are protected and the mines operate safely.

“Anglo’s Queensland coal mines produce some of the best coal in the world and we are confident there will be strong demand for these assets.”

Mr Wanblad said Anglo was aware its “far-reaching changes” would impact employees but they also presented “considerable opportunities … both in delivering the full potential of Anglo American and in the businesses that we will be divesting or demerging, all of which are high quality businesses in our own right.”