Anglo American Coal Bidders Said in Talks for Deal Financing

Updated on
  • Coronado Coal, AMCI seeking financing for Moranbah, Grosvenor
  • Coking coal mines in Queensland may fetch up to $1.5 billion

Bidders for Anglo American Plc’s Australian metallurgical coal assets, including Coronado Coal LLC and AMCI Capital LP, are in talks with banks for acquisition financing, people with knowledge of the matter said.

Coronado and AMCI are competing for Anglo American’s Moranbah and Grosvenor mines with BHP Billiton Ltd., which bid through its coal joint venture with Mitsubishi Corp., the people said, asking not to be identified as the information is private. The assets in Queensland state may fetch as much as $1.5 billion, according to the people.

Anglo American has delayed the decision on a winning bidder until next month, after the London-based company’s earnings on July 28, while the remaining bidders conduct extended due diligence on the mines, the people said. A group led by Glencore Plc have dropped out of the race, according to the people.

Chief Executive Officer Mark Cutifani wants to raise $3 billion to $4 billion from asset sales to reduce Anglo American’s debt and refocus the company as a miner of diamonds, platinum and copper. The company announced in April the $1.5 billion divestment of its Brazilian niobium and phosphate unit to China Molybdenum Co., after agreeing to sell interests in Australian coal mines including Foxleigh, Callide and Dartbrook.

The miner, which is scheduled to report earnings next week, cut its full-year copper-production target on Wednesday after bad weather hit its operations in Chile. Shares of Anglo American, which are up 162 percent this year after collapsing in 2015, fell 0.5 percent to 783.60 pence in London trading at 10:15 a.m.

Private Equity Backing

Anemka Resources, the mining investor backed by Warburg Pincus, and a pairing of Apollo Global Management LLC and Xcoal Energy & Resources LLC also bid for the metallurgical coal assets, according to the people. No final decisions have been made, and talks could still fall apart, the people said. 

Spokesmen for Anglo American, Apollo, BHP and Glencore declined to comment. Representatives for AMCI, Anemka Resources and Coronado didn’t immediately return phone calls seeking comment.

Coronado Coal, backed by Houston-based private investment firm Energy & Minerals Group, in January completed the purchase of West Virginia coal assets from Cliffs Natural Resources Inc. for $174 million in cash and the assumption of certain liabilities.

AMCI, founded by Hans Mende and Fritz Kundrun as a coal and metals trading company, owns assets including a coal mine near the Australian port Newcastle and a stake in the West Pilbara iron ore project in Western Australia state, according to its website.

Anglo American owns 88 percent of the Moranbah North mine, located in Queensland’s Bowen Basin and has annual output of 4 million metric tons of coking coal, according to the company’s website. The nearby Grosvenor project delivered its first coal seven months ahead of schedule, the company said in May.

— With assistance by David Stringer, Kiel Porter, Scott Deveau, Tim Loh, Thomas Biesheuvel, and Agnieszka De Sousa

(Updates with share price, production cut in fifth paragraph.)
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