Anglo American has retained the services of three major banks to assist in the sale of its steelmaking coal assets.

Reports say that the strategic move is part of a broader effort to restructure and fend off a takeover attempt by rival BHP. 

The assets, including five operating coal mines, development projects, and joint ventures in Australia, are estimated by analysts to be valued up to US$7.4 billion.

Duncan Wanblad, Anglo American's CEO, announced in May that the company was preparing to divest these assets as a step toward focusing more on its copper output. 

The announcement followed BHP's unsuccessful takeover attempt. 

“We are committed to divesting our less profitable assets and enhancing our copper production capabilities,” Wanblad stated.

The company has appointed Goldman Sachs, Morgan Stanley, and Centerview Partners to manage the sale. These institutions have previously served as brokers for Anglo American. 

Complicating the sale process is the recent fire at Anglo American's Grosvenor mine in Queensland, which ignited on June 29. 

The assessment of the damage and the timeline for reopening the mine are expected to take several months. 

Analysts from Jefferies noted that the fire could affect both the timing and valuation of the assets, as the Grosvenor mine contributes significantly to the overall value of the steelmaking coal business. 

The brokerage firm estimated the mine accounts for approximately 30 per cent of the AU$6.6 billion valuation they attribute to Anglo's coal assets.

In addition to the coal assets sale, Anglo American's restructuring plan includes the demerger of its South African platinum assets, the divestment or closure of its nickel assets, and the potential demerger or sale of its diamond unit, De Beers. 

The company says it aims to complete these actions by the end of 2025.

The metallurgical coal market has seen significant fluctuations, peaking at close to AU$940 per ton in March 2022 due to global supply concerns following Russia's invasion of Ukraine. 

Prices currently stand at around AU$370 per ton. 

The Grosvenor mine, a key asset for Anglo, produced 2.797 million tons of metallurgical coal in 2023, accounting for 17 per cent of the company's coal output. Expectations for 2024 were set at 3.5 million tons before the recent fire incident.

Grosvenor mine had previously faced operational challenges, including a year-long shutdown in 2020 following an explosion that injured five workers and prompted a government inquiry. 

The mine, which consistently produced more methane gas than it could safely manage, had implemented stringent safety measures post-reopening, with no injuries reported in the recent fire incident.