Coal: business overview

Operating profit

2006

$862m

2007

$614m

EBITDA

2006

$1,082m

2007

$882m

  • Anglo Coal is one of the world’s biggest coal producers and exporters
  • Current expansion programme to raise consolidated coal production to 115 Mtpa by 2010
  • Coal is likely to remain an essential part of the energy mix well into the future

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 mines and has a 50% interest in Mafube mine. Four mines are in the Witbank coalfield which supplies some 20 million tonnes per annum (Mtpa) of thermal coals to the export and local markets and a small volume of metallurgical coal to the export market. Coal is exported through Richards Bay Coal Terminal, in which Anglo Coal has a 27% interest. In addition the New Vaal, New Denmark and Kriel mines supply some 35 Mtpa of thermal coal to Eskom, the South African state-owned electric power utility. Anglo Coal’s Isibonelo mine produces some 5 Mtpa for Sasol Synthetic Fuels under a 21 year supply contract.

Anglo Coal is the fourth largest producer of coal in Australia, with one wholly owned mine and a controlling interest in another four, as well as significant undeveloped coal reserves. Its mines are located in Queensland and New South Wales and produce some 34 Mtpa (25 Mtpa attributable). It also owns an effective 23% interest in the Jellinbah mine in Queensland.

In South America, Anglo Coal has a 33% shareholding in Cerrejón Coal, which has the capacity to produce at a rate of more than 28 Mtpa, with approved expansion plans to increase production to 32 Mtpa. Cerrejón produces thermal coal for export to Europe and the Americas. In addition, Anglo Coal has a 25% interest in Carbones del Guasare (CDG) which owns and operates the Paso Diablo mine in northern Venezuela. CDG produces around 6 Mtpa of thermal and metallurgical coal for pulverised coal injection (PCI).

Anglo Coal has a 66% interest in Peace River Coal, which has one operating metallurgical coal mine and significant coal resources in western Canada. Peace River Coal is expected to produce approximately 1.5 Mtpa in 2008. 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 partners, the Shaanxi Coal Geological Bureau.

Anglo Coal signed shareholder agreements with Inyosi, a broad-based black economic empowerment (BEE) company, in November 2007 to create an empowered coal company housing key current and future domestic and export-focused coal operations in South Africa. In terms of the agreements, Inyosi will acquire, subject to certain conditions precedent, 27% of Anglo Inyosi Coal, creating a company valued at R7 billion and incorporating several key Anglo Coal assets; namely Kriel Colliery, which is an existing mine, and the Elders, Zondagsfontein, New Largo and Heidelberg projects.