Despite the recent rally in commodities prices, Anglo American Plc will push ahead with the proposed South African asset disposals as part of its business reorganization plan announced in February.
The rebound in prices for iron ore, as well as coking and thermal coal, will enable the mining giant to get better prices for the assets, Bloomberg News reported Oct. 5, citing the company's deputy chairman of South African operations, Norman Mbazima.
Anglo is looking to sell its Kumba Iron Ore Ltd. subsidiary, coal mines and manganese operations in South Africa while planning to focus on its more profitable Anglo American Platinum Ltd. unit along with its copper and De Beers SA diamonds businesses.
"It was which commodities do we want to be in? Which have long-term attractiveness? Those reasons have not changed as a result of changes in the price," Mbazima, who is overseeing the sales plan, commented.
Mbazima said the bid process for South African thermal coal assets will enter the third bidding round, which will "hopefully" be the final round.
South Africa's Public Investment Corp., Anglo American's biggest shareholder, with a 13.4% stake, wants more say in the sales process and wants to increase the share and control of South African investors in the company, Public Investment Corp. CEO Dan Matjila told Bloomberg News the same day.
In September, the fund came out against selling African assets during the distressed commodity price environment. The fund previously wanted a shareholder vote over the proposed sale of half of its mines in the country.
If Anglo American opts to proceed with the sales program, the public fund wants the company to create a new miner containing all of the company's African operations.
Mbazima said the company will make sure that any deal for the sale works out for all stakeholders as well as the country. But in case "it isn't good, we'll engage with the PIC."