Anglo American has agreed to sell its Australian steelmaking coal portfolio to Dhilmar Limited for up to US$3.875bn in cash, marking a major step in the group’s portfolio simplification ahead of its planned merger with Teck.
The consideration comprises US$2.3bn payable upfront at completion, with a further price-linked earnout of up to US$1.575bn. The proceeds will be used to reduce net debt, helping shore up the balance sheet as Anglo restructures around its preferred copper, iron ore and crop nutrients core.
With this deal, Anglo completes its exit from Australian steelmaking coal, taking aggregate cash proceeds from the segment to up to US$4.9bn, including the earlier US$1bn sale of its Jellinbah interest.
Duncan Wanblad, CEO of Anglo American, said: “Our agreement for Dhilmar to acquire our steelmaking coal business in Australia is testament to the high quality of these assets and our people. Dhilmar’s leadership brings considerable experience of operating major mining assets, including in steelmaking coal, in Southeast Asia and Canada. We will work together with the Dhilmar team and with our workforce, local communities, government, customers, and partners to ensure a successful transition.
“This agreement represents another major step in the simplification of our portfolio ahead of completing our merger with Teck. Through this transaction, we will complete our exit from steelmaking coal, delivering aggregate cash proceeds of up to US$4.9 billion, given the prior completion of the sale of our interest in the Jellinbah mine for approximately US$1 billion.”