Anglo American says its coal mine sale could wrap up before the end of the year

Anglo American’s Queensland steelmaking coal auction could be wrapped up by the end of the year, and the company says damage from the fire at Grosvenor appears to be limited.

Coal being stockpiled at Anglo American’s Moura coal mine.

Anglo American says the sale of its Queensland coal assets could be wrapped up by the end of the year, and the assessment of damage caused by a fire at its Grosvenor mine is “encouraging’’.

The company put the steelmaking coal portfolio up for sale while fending off BHP’s takeover overtures earlier this year, with the five-mine portfolio thought to be worth about $US5bn.

A fire that started at the Grosvenor mine in central Queensland on June 29 has complicated the process, but Anglo American chief executive Duncan Wanblad told the Financial Times Mining Summit in London on Thursday that the signs at this stage were positive.

“The imagery we have got from the underground area is very encouraging,’’ Mr Wanblad said.

Operations at Grosvenor moved from an emergency response phase to a project phase in late August.

He told the FT Summit that the most recent assessment showed the damage had been “limited and the ore bodies seem to be very much intact’’.

Mr Wanblad said the sale process for the broader portfolio could be concluded by the end of the year.

“In the middle of November, we should be getting final binding offers,” Mr Wanblad said. “Then we will start negotiating a SPA (sales and purchase agreement). Now, with any luck we should be able to conclude that process just before the end of the year.”

The Australian’s DataRoom column revealed the bid closure date earlier this week and also reported that Yancoal, Glencore and Stanmore Coal are considered the most serious contenders for Anglo’s coal assets. Adani also put in an offer in the first round of the process, which concluded on September 9.

Coronado Global Resources, BHP and Whitehaven are not bidding, and Peabody Energy is not thought to be interested.

The understanding is that suitors may submit offers for single assets as well as the portfolio as a whole, and then the entire offering will be assessed.

Yancoal told its shareholders in August that it had built a $1.5bn war chest for acquisitions, suspending its dividend payments to give it more balance sheet strength.

The company’s shares plummeted on the decision, and have yet to fully recover, changing hands at $5.98 on Friday, compared with $6.96 before the announcement.

Yancoal bought Coal and Allied from Rio Tinto in 2017, and a successful buyout of the Anglo assets would transform Yancoal into one of the top three steelmaking coal producers globally.

Anglo’s Queensland mines produced 15 million tonnes of coal last year with plans to hit 20 million tonnes a year by 2026.

Originally published as Anglo American says its coal mine sale could wrap up before the end of the year