Apollo Global consortium emerges front-runner for Anglo's Australian coal mines
03 August 2016
A consortium led by US private equity firm Apollo Global Management has emerged as the front-runner for Anglo American's Australian metallurgical coal mines, valued at up to $1.5 billion, Reuters yesterday reported, citing two sources familiar with the matter.
Apollo has teamed up with its energy-focused peer Riverstone Holdings and US coal exporter Xcoal Energy & Resources for the Anglo American's Moranbah and Grosvenor metallurgical coal mines.
Reuters had earlier reported that BHP Billiton, Glencore International and other suitors from China, Japan and India were looking at the assets.
Anglo American had earlier said that it would divest assets worth around $4 billion in order to cut net debt to under $10 billion by the end of the year and also focus on copper, platinum and diamonds.
The miner posted a $5.6 billion full-year loss in 2015 and credit ratings agencies Standard & Poor's, Fitch, and Moody's cut the company's rating to junk in February.
In April, it agreed to sell its niobium and phosphates assets to China Molybdenum for $1.5 billion in cash, (See: Anglo American to sell niobium and phosphates assets to China Molybdenum for $1.5 bn) and a month earlier, agreed to sell its 70-per cent stake in the Foxleigh metallurgical coal mine in Queensland, Australia to a consortium led by Taurus Fund Management. It also exited Brazil by selling its niobium and phosphates assets to China Molybdenum for $1.5 billion.
Moranbah is an underground long wall mine which began operating in 1998. It is a hard coking coal mine located in the Northern part of the Bowen Basin in Central Queensland and the coal, used in steelmaking, is exported to Japan, Korea, Taiwan, India Brazil and Europe.
Moranbah is 88 per cent owned by Anglo American, with the remaining 12 per cent owned by joint venture partners Nippon Steel, Mitsui Coal, NS Resources, Shinsho Australia, and JFE Mineral.
The mine employs more than 600 people, and is estimated to have a life of 18 years.
Anglo American's $1.95 billion Grosvenor has only just gone into production after a five-year development. It is located adjacent to Moranbah.