Thungela Resources, the coal miner spun off from Anglo American, will officially take control of an Australian thermal coal mine from Friday after the necessary conditions for the deal which was first announced in February were met.
Through a new company, Sungela, Thungela will acquire an 85% interest in the Ensham coal mine in Queensland at a purchase consideration of about R4.1bn and will take operational control on September 1.
The acquisition of the Ensham business is a step in Thungela’s strategy to pursue geographic diversification, the company said on Tuesday.
“The transaction will also allow the group to leverage its core capabilities in a commodity and mining method which it understands well, while providing access to new markets and to the Newcastle export coal price,” it said.
Thungela CEO July Ndlovu said earlier this year: “Given the similarity in operating methodology between Ensham and our South African underground operations, we can leverage our core skills to create value. We are pleased to be entering Australia, a leading mining geography with a successful track record of thermal and metallurgical coal production and reliable, well-established port and rail facilities.”
Based on Ensham’s recent performance, the mine is expected to produce 2.7-million tonnes of export saleable production at a free-on-board cost of $110-$120 per tonne.
With Denene Erasmus
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