South32 to spin off coal business
Eskom’s demand for 51% empowerment ownership of coal suppliers played a role in the decision to separate the thermal coal business, says CEO Graham Kerr
Diversified miner South32 is pumping cash as commodity prices remained firm and lower working capital and improved quarterly output led to increased returns to shareholders. South32 is another large mining company that is scaling down its presence in SA. It is setting up its 27.5-million tonnes a year thermal coal business, which supplies Eskom and export markets, to be a stand-alone business by the end of June. South32 CEO Graham Kerr has said the power utility’s demands for 51% empowerment ownership of coal suppliers, which would leave South32 as a minority participant in its mines, had played a role in the decision to separate the thermal coal business. Anglo American has sold all its thermal coal mines that supply Eskom, citing similar reasons. South32’s exit from its South African thermal coal business would "simplify our business, lower overhead costs and fundamentally change the way we work", the company said in a quarterly production update. South32 increased its net cash to...