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Coal

Conveyor belt at Dawson mine in Queensland, Australia. The Dawson expansion project, which was completed in 2008, was one of the largest coal mining ventures ever undertaken in Australia, with the Dawson Complex having an annual capacity of 12.7 Mt of export coal

Business overview

Anglo Coal is the world’s sixth largest private sector coal producer and exporter, with operations in South Africa, Australia, South America and Canada.

In South Africa, Anglo Coal owns and operates eight operations and has a 50% interest in the Mafube colliery. Four operations are in the Witbank coalfield and supply some 22 million tonnes per annum (Mtpa) of thermal coals to the export and local markets. In addition the New Vaal, New Denmark and Kriel mines are dedicated to supplying some 35 Mtpa of thermal coal to Eskom. Anglo Coal’s Isibonelo operation produces some 5 Mtpa for Sasol Synthetic Fuels under a 20 year supply contract.

The bulk of exports consist of thermal coal, though a small volume of metallurgical coal is also exported. Anglo Coal routes nearly all of its export coal through the Richards Bay Coal Terminal, in which it holds a 27% interest.

Anglo Coal is the fourth largest producer of coal in Australia, with one wholly owned mine and a controlling interest in another five, as well as significant undeveloped coal reserves. Its mines are located in Queensland and New South Wales and produce some 28 Mtpa attributable of metallurgical (13 Mtpa) and thermal (15 Mtpa) coal, largely for the export market. It also owns an effective 23% interest in the Jellinbah mine in Queensland which produces 1 Mtpa of metallurgical coal.

In South America, the company has a 33% shareholding in Cerrejón Coal, a 32 Mtpa (10.4 Mtpa attributable) opencast operation in Colombia which serves the export thermal coal market, as well as a 25% interest in Carbones del Guasare (CdG), which owns and operates the Paso Diablo mine in northern Venezuela, which produced about 5 Mtpa of thermal and metallurgical (PCI) coal for the year.

Anglo Coal has a 74% interest in Peace River Coal in Canada, which produced 0.8 Mtpa of primarily metallurgical coal in 2008 from the Trend Mine in British Columbia. New metallurgical coal development projects are currently under investigation at the adjacent Roman and Horizon properties and further resource evaluation is under way at several other properties held by Peace River Coal.

Anglo Coal also has a 60% interest in the Xiwan coal mine lease area in China, where the feasibility of developing the mine is under evaluation in conjunction with Anglo Coal’s joint venture partner, the Shaanxi Coal Geological Bureau.

In February 2007, Anglo Coal announced the creation of Anglo Inyosi Coal, a newly formed broad-based economic empowerment (BEE) company valued at approximately $1 billion. Anglo American own 73% of Anglo Inyosi Coal, with the remaining 27% held by Inyosi. The new company incorporates several key Anglo Coal assets, namely the existing Kriel colliery and the greenfield projects of Elders, Zondagsfontein, New Largo and Heidelberg. The transaction represents a major milestone in meeting the BEE objectives set out in South African legislation. The outstanding conditions precedent to the transaction are expected to be fulfilled in the first half of 2009, following which the transaction will complete.

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Operating profit

2008 $2,240m 2007: $614m

EBITDA

2008 $2,585m 2007: $882m
  • Anglo Coal is one of the world’s largest private sector coal producers and exporters
  • Anglo Coal is focused on expanding from its existing strong position
  • Coal is likely to remain an essential part of the energy mix well into the future