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ANGLO AMERICAN PLC - Anglo American announces sale of Eskom-tied thermal coal operations in South Africa

Release Date: 10/04/2017 08:00
Code(s): AGL     PDF:  
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Anglo American announces sale of Eskom-tied thermal coal operations in South Africa

Anglo American plc
(Incorporated in England and Wales)
(Registration number: 3564138)
Registered office: 20 Carlton House Terrace, London, SW1Y 5AN
ISIN: GBOOB1XZS820
JSE Share Code: AGL
NSX Share Code: ANM

Anglo American announces sale of Eskom-tied thermal coal operations in South Africa

Anglo American plc (“Anglo American”) announces the sale of its Eskom-tied domestic thermal
coal operations in South Africa to a wholly owned subsidiary of Seriti Resources Holdings
Proprietary Limited (“Seriti”), a company majority owned by historically disadvantaged South
Africans (“HDSAs”) and led by a management team with extensive experience of operating and
developing large coal mines in South Africa (“the Transaction”).

The Eskom-tied domestic thermal coal operations consist of the New Vaal, New Denmark and
Kriel collieries, as well as four closed collieries (the “Operations”). The Transaction will result in
Seriti becoming the second largest provider of thermal coal to Eskom, supplying almost a quarter
of Eskom’s current annual coal requirements.

The consideration payable for the Operations as at 1 January 2017 is ZAR2.3 billion
(approximately US$164 million). Under the terms of the Transaction, the consideration payable
will be adjusted for cash flows generated by the Operations between 1 January 2017 and the
date on which the transaction is completed in order to determine the final payment to be made
by Seriti upon completion.

Mark Cutifani, Chief Executive of Anglo American, said: “We are pleased to have agreed the sale
of our Eskom-tied domestic thermal coal operations in South Africa. This transaction forms part
of our ongoing commitment to reshape and upgrade our global asset portfolio, recognising
appropriate value and further demonstrating Anglo American's longstanding support for the
development and sustainability of South Africa's mining industry.”

Norman Mbazima, Deputy Chairman of Anglo American South Africa, said: “We believe that the
sale to Seriti supports transformation objectives for the industry as well as the country, while
ensuring a sustainable, reliable and cost efficient supply of coal to Eskom.”

Mike Teke, Chief Executive of Seriti, said: “Seriti is excited about the Transaction which
represents a significant step-forward in our vision to become a black-controlled, broad based
South African mining champion, and a coal player of significant size and scale. The Transaction
allows Seriti to achieve its strategic objective of preserving and operating strategic energy assets
for the benefit of South Africa and its people. Our structure brings together an experienced team
capable of operating and developing large scale thermal coal assets and provides a unique
mining opportunity for black women. The team looks forward to managing and growing the
Operations going forward, with a focus on ensuring their ongoing sustainability, given their
strategic importance.”

The Transaction is subject to conditions precedent that are customary for a transaction of this
nature, including regulatory approvals in South Africa, as well as Eskom’s consent for the transfer
to Seriti of the coal supply agreements which govern the Operations’ supply of coal to Eskom.
The Transaction is expected to close by the end of 2017.

10 April 2017

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

For further information, please contact:

 Media                                                    Investors
 UK                                                       UK
 James Wyatt-Tilby                                        Paul Galloway
 james.wyatt-tilby@angloamerican.com                      paul.galloway@angloamerican.com
 Tel: +44 (0)20 7968 8759                                 Tel: +44 (0)20 7968 8718

 Marcelo Esquivel                                         Trevor Dyer
 marcelo.esquivel@angloamerican.com                       trevor.dyer@angloamerican.com
 Tel: +44 (0)20 7968 8891                                 Tel: +44 (0)20 7968 8992

 South Africa                                             Sheena Jethwa
 Pranill Ramchander                                       sheena.jethwa@angloamerican.com
 pranill.ramchander@angloamerican.com                     Tel: +44 (0)20 7968 8680
 Tel: +27 (0)11 638 2592

 Ann Farndell
 ann.farndell@angloamerican.com
 Tel: +27 (0)11 638 2786


Notes to editors:

Seriti is a broad-based, majority HSDA-owned and controlled South African mining company,
established with the aim of preserving and operating strategic energy assets for the benefit of
South Africa and its people. Seriti is owned jointly by four strategic “anchor” shareholders, namely
Masimong Group Holdings Proprietary Limited (“Masimong”), Thebe Investment Corporation
(“Thebe”), Zungu Investments Company Proprietary Limited (“ZICO”) and Community Investment
Holdings Projects (“CIH Projects”). Seriti’s management team will be led by Mike Teke who has
extensive mining experience through the acquisition, operation and development of Optimum
Coal Mines and Koornfontein Mines which produced approximately 10Mtpa of saleable domestic
and export thermal coal and the development of other large scale thermal coal projects. Seriti
intends to provide meaningful equity participation for management, employees and communities
in its structure.


Anglo American is a globally diversified mining business. Our portfolio of world-class
competitive mining operations and undeveloped resources provides the raw materials to meet
the growing consumer-driven demands of the world’s developed and maturing economies. Our
people are at the heart of our business. It is our people who use the latest technologies to find
new resources, plan and build our mines and who mine, process and move and market our
products to our customers around the world.

As a responsible miner - of diamonds (through De Beers), platinum and other precious metals,
copper, nickel, iron ore and coal - we are the custodians of what are precious natural resources.
We work together with our key partners and stakeholders to unlock the long-term value that those
resources represent for our shareholders and for the communities and countries in which we
operate – creating sustainable value and making a real difference.
www.angloamerican.com

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