Mining company Anglo American announced plans to spinoff its thermal coal operations in South Africa as it aims for a “responsible transition” away from the fossil fuel.
The company said it will spin off its South African thermal coal operations to a new holding company, Thungela Resources Limited, conditional on shareholder approval on May 5. Thungela is a South African producer and exporter of thermal coal.
Anglo American will inject into Thungela cash of $170 million along with contingent support until the end of 2022 if thermal coal prices fall below a certain level. Its marketing business will also support Thungela and its products for 3½ years.
Anglo American shareholders will own 100% of the issued share capital of Thungela, receiving one Thungela share for every 10 Anglo American shares they hold. The company said shareholders could then increase, decrease or maintain their interests in Thungela based on their investment criteria.
Thungela will then be listed on the Johannesburg Stock Exchange and the London Stock Exchange.