Anglo Coal bidders MTN Chairman’s Phembani, Masimong Minerals will list if successful

By Loni Prinsloo and Paul Burkhardt

(Bloomberg) – The two main bidders for Anglo American Plc’s South African coal mines plan to list their companies if they are successful in buying the operations, according to three people familiar with the plans.

Phuthuma Nhleko

Phembani Group, founded by MTN Group Ltd. Chairman Phuthuma Nhleko, and Masimong Minerals (Pty) Ltd. are seen as the leading bidders to purchase the mines that produce coal for the local market, with offers ranging from R2 billion ($152 million) to R3 billion, said two of the people. The black-owned companies both plan to sell shares if they win the assets, said the people, who asked not to be identified because the discussions are private.

South Africa is pushing companies to boost black involvement in the economy to make up for discrimination during apartheid. State-owned power producer Eskom Holdings SOC Ltd., which burns coal for about 90 percent of its generation and is the country’s largest buyer of the fuel, says it wants suppliers to be black-controlled.

Anglo decided in February 2016 to unload more assets after commodity prices plunged and as it sought to pay debt built up during years of expansion. It’s since scaled back those plans as prices rebounded and will probably keep its coal-exporting mines in the continent’s most-industrialized economy.

The New Vaal, Kriel and New Denmark mines mainly sell coal to Eskom and together account for about half of Anglo’s South African coal production. A final decision on the sale will be made before the end of the month, one person said.

Coal Investments

Phembani would add the mines to its other coal investments that include stakes in Exxaro Resources Ltd. and South32 Ltd., said one of the people. Masimong Minerals is chaired by Mike Teke, the president of South Africa’s Chamber of Mines. Phembani and Masimong Minerals declined to comment when contacted by email.

A worker walks past a board outside Anglo American offices in Johannesburg. REUTERS/Siphiwe Sibeko

“Anglo American continues to progress the sale of its Eskom-tied, domestic thermal-coal operations,” Anglo spokesman Pranill Ramchander said by phone, declining to comment further on the bidders.

Phembani’s Shanduka Coal unit owns 50.01 percent of Izimbiwa Coal, with Glencore Plc holding the rest, according to Phembani’s website.

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