Anglo forms new SA coal group

JOHANNESBURG – Anglo American Plc has formed a new South African coal group, Anglo Inyosi Coal, worth seven billion rand and 27 per cent owned by black investors, the mining group said yesterday.

Anglo said the new company will incorporate selected key coal projects in South Africa as well as the Kriel colliery and have a 4,1 billion tonnes coal resource base with an estimated annual production of 48,5 million tonnes. The deal is in line with the government’s black economic empowerment (BEE) policy aimed at giving black South Africans, disadvantaged under apartheid, a bigger stake in Africa’s economic powerhouse.Under South Africa’s Mining Charter, firms must meet a range of requirements to renew their mining licences, including minimum equity ownership by blacks, higher numbers of blacks in management and improved conditions for mining communities.The transaction is one of the biggest BEE deals so far this year.Anglo American said newly formed BEE group Inyosi would take a stake in the new coal group under the terms of the deal, creating a leading South African coal group.Inyosi is led by the Lithemba Consortium and Pamodzi Coal and includes WDB Investment Holdings, an investment firm run by women.About 27 000 people, many of them women in impoverished communities, will benefit from the deal, according to Inyosi’s stakeholders.It will be funded through a 25 million rand equity contribution from Inyosi and a 68 million rand contribution from Anglo Capital South Africa.Anglo will then subscribe for about 6,9 billion rand worth of preference shares in the new firm.”The funding is well within the norms of BEE transactions and not material to the Anglo group’s earnings,” Philip Baum, acting chief executive of Anglo American South Africa Ltd., said in a press conference in Cape Town.Anglo American, which will provide financing for the development of the coal projects, said the formation of the new group was a key component of the growth strategy of its coal business.The new group will have a significant market in South Africa and sizeable exports of 3,5 million tonnes per year.”The development of these assets will underpin our objective of building world class coal assets and reinforces Anglo American’s strategy of embracing transformation in South Africa,” said John Wallington, chief executive of Anglo Coal Global.Nampa-ReutersThe deal is in line with the government’s black economic empowerment (BEE) policy aimed at giving black South Africans, disadvantaged under apartheid, a bigger stake in Africa’s economic powerhouse.Under South Africa’s Mining Charter, firms must meet a range of requirements to renew their mining licences, including minimum equity ownership by blacks, higher numbers of blacks in management and improved conditions for mining communities.The transaction is one of the biggest BEE deals so far this year.Anglo American said newly formed BEE group Inyosi would take a stake in the new coal group under the terms of the deal, creating a leading South African coal group.Inyosi is led by the Lithemba Consortium and Pamodzi Coal and includes WDB Investment Holdings, an investment firm run by women.About 27 000 people, many of them women in impoverished communities, will benefit from the deal, according to Inyosi’s stakeholders.It will be funded through a 25 million rand equity contribution from Inyosi and a 68 million rand contribution from Anglo Capital South Africa.Anglo will then subscribe for about 6,9 billion rand worth of preference shares in the new firm.”The funding is well within the norms of BEE transactions and not material to the Anglo group’s earnings,” Philip Baum, acting chief executive of Anglo American South Africa Ltd., said in a press conference in Cape Town.Anglo American, which will provide financing for the development of the coal projects, said the formation of the new group was a key component of the growth strategy of its coal business.The new group will have a significant market in South Africa and sizeable exports of 3,5 million tonnes per year.”The development of these assets will underpin our objective of building world class coal assets and reinforces Anglo American’s strategy of embracing transformation in South Africa,” said John Wallington, chief executive of Anglo Coal Global.Nampa-Reuters