Anglo American coal suitors get ready for September 9 bid date

On offer for the suitors are Anglo American’s Capcoal and Dawson assets, and its most attractive mines, Moranbah North and Grosvenor.

Parties keen to haul Anglo American’s lucrative Australian metallurgical coal assets into their stable are positioning themselves to lob their first round offers when due on September 9.

The big unknown in the contest so far is whether Indian multinational conglomerate Adani Group surfaces in the auction.

Adani has invested $5bn in Australia, with the North Queensland Export Terminal at Abbot Point and the regional Queensland-based Adani Mining, its flagship development the Carmichael thermal mine and rail project, 300km west off the Queensland coast in the Galilee Basin, delivering 10 million tonnes per annum.

However, the contest favourite remains Glencore, which is said to be focused on the opportunity.

After entering the Anglo American coal mine competition, Glencore announced it had abandoned its plans to split off the fossil fuel operations from its mining business, with shareholders rejecting a plan to divest the commodity amid bumper profits.

Glencore recently bought coking coal miner Teck Resources and it is one of the largest coal miners in the country.

Yancoal, 62 per cent owned by Chinese state-owned Yankuang Energy, is working with CITIC CLSA and RBC, and is in the competition. The wildcard is said to be the Indonesian coal mining groups including Buma Energy and Golden Energy through the Australian-listed Stanmore Coal.

Earlier, price expectations in the Goldman Sachs and Morgan Stanley-run competition were about $US5bn ($7.5bn), but that was before a fire broke out at the Grosvenor mine at Moranbah, about 1000km northwest of Brisbane, causing its closure.

The fire has been suffocated within the mine.

On offer for the suitors that have been assessing the opportunity in a data room are Anglo American’s Capcoal and Dawson assets, and its most attractive mines, Moranbah North and Grosvenor.

Also in the mix are its Aquila project, an interest in Jellinbah and the potential Moranbah South project.

Analysts had earlier estimated the Queensland assets contributed $US3.3bn to Anglo’s overall value.

However, this was before the Grosvenor fire, which was caused by a gas ignition incident in June.

For 2023, Anglo American’s steelmaking coal operations generated 15 million tonnes of coal, equating to $1.3bn of earnings before interest, tax, depreciation and amortisation.

It is targeting the production of about 20 million tonnes per annum at a unit cost of about $US100 a tonne by 2026.

Anglo American announced a company break-up while fending off BHP’s advances, leading to some of the best coal mines in the world – which sat within its portfolio – being put on the market. BHP is not believed to be bidding.

Pressure on Regis

Elsewhere, the federal government’s decision to declare part of Regis Resource’s McPhillamys Gold Project in NSW protected under the Aboriginal and Torres Strait Islander Heritage Protection Act places more pressure on the $1bn-plus gold miner to embark on mergers and acquisitions to gain growth, say market experts. Doubts were already emerging whether the development of the McPhillamys project stacked up for Regis before the order that it says no longer makes the mine project viable.

Many believe the gold miner would have wanted the option.

The project had proved to be costly, and Regis was yet to make a Final Investment Decision.

Possible dance partners are Gold Road Resources, Emerald Resources and Bellevue Gold.

At the Diggers and Dealers mining conference in Kalgoorlie this month, managing director Jim Beyer said he was considering bringing in a joint venture partner as well as considering merger and acquisition opportunities.

McPhillamys in the Blayney-Kings Plains region in NSW is one of Australia’s largest undeveloped gold deposits suitable for an open pit mine and would have been a project worth billions of dollars.

Regis also has a 30 per cent interest in the Tropicana gold mine, for which it paid $900m in 2021, which some analysts considered to be punchy, and the Duketon gold mining project in the North Eastern Goldfields of WA about 130km north of Laverton. Another question is whether Mr Beyer opts to step down and move on to a new opportunity after being at the helm for about six years.