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Anglo demerger displays risks of waiting too long to drop coal

April 08, 2021

Financial Times ($):

Miners like mines. 

They like planning them. They like building them. They like running them. They don’t like selling them. In fact, they find it so difficult they sometimes end up giving them away.

Anglo American is handing its South African thermal coal assets to its own shareholders, in the form of a demerger into a Johannesburg and London-listed company called Thungela.

Such is the toxicity of coal that getting shot of perhaps 3 to 4 per cent of Anglo’s earnings this year was good for a bump in the group’s share price. Shareholders will doubtless approve the deal. 

Tim Buckley, at the Institute for Energy Economics and Financial Analysis, calls it an “abrogation of responsibility” that reflects the fact that these assets are now unsellable and is bad for workers, investors and the planet. The new standalone company is probably more motivated to invest to lengthen the mines’ lives from up to 11 years to closer to 20 years. 

[Helen Thomas]

More: Anglo shows making a clean break from coal is far from easy

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