Anglo shares rise amid renewed takeover speculation
BHP is now free to relaunch a bid to acquire Anglo, as the six-month standstill mandated by London’s takeover rules has expired.
The world’s largest mining company BHP Group has hired U.S. investment bank JP Morgan to sell its Australian thermal coal mine, following pressure from investors concerned about global warming, two sources said.
Increased scrutiny from investors, regulators and climate change activists is prompting miners to limit their exposure to fossil fuels.
Rival mining companies have also taken steps to go thermal coal free
BHP’s Mt Arthur open cut mine, in the Hunter Valley region of New South Wales, supplies thermal coal, used as fuel for power plants, to domestic and international customers and could fetch between $1.5 billion and $1.8 billion, banking sources said on condition of anonymity.
Thermal coal only accounts for 3% of the portfolio of BHP, which has been asked by green groups and some shareholders to leave any industry associations with policies that fail to match the company’s support for the 2015 Paris climate accord.
Its activist investor Elliott, which holds a 4.7% stake in the mining company, has pushed for the sale of the thermal coal assets, which also include one third of the Cerrejon mine in Colombia.
BHP and JP Morgan declined to comment.
Rival mining companies have also taken steps to go thermal coal free, with Rio Tinto selling its last coal mines in 2018, and Anglo American considering the spinoff or sale of its South African coal operations within the next two or three years.
There is only a handful of companies including Australia’s Whitehaven Coal Ltd and India’s Adani Enterprises likely to express interest in the Mt Arthur mine, the sources said.
Sales processes have slowed over the past few months, as government lockdowns to contain the novel coronavirus halted mine visits and due diligence.
But as lockdown measures are gradually lifted, banking sources expect activity to resume in the coming months, with BHP’s sale of Mt Arthur possible by the end of the year.
(By Clara Denina, Melanie Burton and Zandi Shabalala; Editing by Barbara Lewis)
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