JOHANNESBURG (Reuters) – Anglo American plc said on Thursday it would spin off its South African thermal coal business into a new company listed in Johannesburg and London, as it moves to transition out of assets that mine the most polluting fossil fuel.
The London-listed miner said the transaction would be subject to shareholder approval in May.
The anticipated move comes as mining companies are under pressure to stop mining coal from investors and governments keen to switch to cleaner fuels.
Anglo said it would provide an initial cash injection of 2.5 billion rand ($172.68 million) to the spin-off company, Thungela Resources Limited, and sell and market its products for at least three years.
Thungela plans to woo investors by paying 30% of free cash flow in dividends, its chief executive July Ndlovu said on a call with reporters.
Anglo said it would have a primary listing on the Johannesburg Stock Exchange and a standard listing on the London Stock Exchange. Investors will receive one share in Thungela for every 10 shares they hold in Anglo American, the company said in a statement.
Anglo is also looking to exit its Cerrejon thermal coal mine in Colombia within 1-1/2 to 2 years, boss Mark Cutifani previously said. ($1 = 14.4773 rand)
(Reporting by Tanisha Heiberg, Zandi Shabalala and Clara Denina; editing by John Stonestreet)