Anglo coal-bid win could draw Phembani, Masimong listing

Johannesburg - The two main bidders for Anglo American's South African coal mines plan to list their companies if they are successful in buying the operations, according to three people familiar with the plans.

Phembani Group, founded by MTN Group chairperson Phuthuma Nhleko, and Masimong Minerals are seen as the leading bidders to purchase the mines that produce coal for the local market, with offers ranging from R2bn to R3bn, said two of the people.

The black-owned companies both plan to sell shares if they win the assets, said the people, who asked not to be identified because the discussions are private.

South Africa is pushing companies to boost black involvement in the economy to make up for discrimination during apartheid. State-owned power producer Eskom Holding, which burns coal for about 90% of its generation and is the country’s largest buyer of the fuel, says it wants suppliers to be black-controlled.

Anglo decided in February 2016 to unload more assets after commodity prices plunged and as it sought to pay debt built up during years of expansion. It’s since scaled back those plans as prices rebounded and will probably keep its coal-exporting mines in the continent’s most-industrialised economy.

The New Vaal, Kriel and New Denmark mines mainly sell coal to Eskom and together account for about half of Anglo’s South African coal production. A final decision on the sale will be made before the end of the month, one person said.

Coal investments

Phembani would add the mines to its other coal investments that include stakes in Exxaro Resources and South32, said one of the people. Masimong Minerals is chaired by Mike Teke, the president of South Africa’s Chamber of Mines. Phembani and Masimong Minerals declined to comment when contacted by email.

“Anglo American continues to progress the sale of its Eskom-tied, domestic thermal-coal operations,” Anglo spokesperson Pranill Ramchander said by phone, declining to comment further on the bidders.

Anglo rose 1.8% to 1 201.5 pence by 08:23 in London, the highest in a week.

Phembani’s Shanduka Coal unit owns 50.01% of Izimbiwa Coal, with Glencore holding the rest, according to Phembani’s website.