May 7, 2017 - Anglo American has agreed to divest its 88.17% stake in the Drayton thermal coal mine and Drayton South project in Australia to Malabar Coal.
The financial terms of the transaction, which is subject to various conditions, have not been revealed.
All the mining activities at the Drayton mine were ceased by Anglo American last year.
The assets included in the transaction are a coal preparation plant, coal stockpiling facilities, a rail loop, offices, workshops among others.
Malabar Coal said the Drayton assets would provide infrastructure suitable for use by its Spur Hill underground coking coal project.
Malabar Coal chairman Wayne Seabrook said: “While this transaction delivers substantial efficiencies and environmental benefits for Malabar’s Spur Hill operation, there may also be an opportunity in future to develop an underground mine within EL 5460.”
The transaction will be executed through a sale of shares in the subsidiaries holding Anglo American's stake in the Drayton mine and project.
Anglo American CEO Mark Cutifani said: “The agreement to sell the Drayton thermal coal mine marks further progress as we focus our global portfolio around our largest and most competitive assets.”
The South Africa and UK based global mining company had been troubled with rising debts owing to the decline of mining industry and commodity prices in recent times.
At the company’s annual general meeting last month, its CEO revealed that there was a need to take bold action like accelerating sale processes to reduce the net debt quickly to manageable levels.
Last month, Anglo American agreed to divest its South African thermal coal operations for $164m to a Seriti Resources subsidiary.
The transaction included the domestic thermal coal operations of Anglo American that are related to Eskom, the South African state-owned electric utility.
Prior to that in February, a subsidiary of Anglo American named as the Anglo American Platinum agreed to divest its 85% stake in the Union Mine located in South Africa along with a 50.1% stake in MASA Chrome for an initial purchase price of $30m.