Beleaguered Ellison faces MinRes shareholders
The board of under-siege Mineral Resources faced grilling in Perth over a governance scandal, amid unexpected expressions of support.
Australia’s South32 (ASX, LON, JSE:S32), which has been trying to sell its South African thermal coal operations for almost a year, is finally kissing the fossil fuel goodbye as Seriti Resources has won a bid for the assets.
Final offers, according to Bloomberg, were in a range of $300 million to $350 million. The other contenders included Sibambene Coal, a consortium backed by global energy trader Mercuria, and Exxaro Resources. The South African miner, however, dropped out of the race due to competition issues as the firm is already a major coal producer and supplier to state-owned power utility Eskom.
South32, which spun out of BHP in 2015, separated the unit from the rest of the business in early 2018 with the objective of selling it.
The miner, which spun out of BHP in 2015, has been trying to sell its South African thermal coal operations for almost a year
Seriti Resources bought Anglo American’s (LON: AAL) New Largo coal assets in 2017 and has said it is on the hunt for more, including South Africa’s Optimum Coal mine, formerly owned by Glencore.
In the past year, top mining companies have been reducing or eliminating their exposure to coal on environmental grounds. Rio Tinto (ASX, LON: RIO), the world’s second largest miner, fully exited the coal sector in March 2018, with the sale of its Kestrel coal mine in Australia to private equity manager EMR Capital and Indonesia’s Adaro Energy for $2.25 billion.
Rival BHP (ASX, NYSE:BHP) followed suit. The world’s No. 1 miner revealed in July that it was mulling options to divest its thermal coal business, which includes assets in Australia and Colombia.
The Melbourne, Australia-based giant took a first step away from thermal coal last year by leaving the World Coal Association (WCA). The miner, which publicly supports the Paris climate accord, cited differences on climate change as the main reason to end its membership in the lobby group.
The trend has triggered an industry-wide reaction. COAL21, an organization set up to research low-emission coal technologies, is funding a A$5 million media campaign aimed at making Australians feel “proud about coal.”
The group, established 15 years ago to research carbon capture and storage (CCS), intends to roll out the campaign across media platforms including television, digital, print, radio and social media in September.
The core message is that the commodity can be made cleaner by capturing the carbon emissions from coal-fired power stations and storing them underground.
CCS technologies have also received backing from US President Donald Trump, who has pledged to revive coal mining in the country, as well as Congress, which has given tax breaks to those who install carbon capture and storage facilities.
