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Anglo American reviews coal portfolio

World Coal,

UK and South African listed mining firm Anglo American's broader coal portfolio is under review for possible sale, in addition to the two thermal coal export mines already offered for sale in Australia.

According to Argus, the Callide and Dartbrook mines are set to be sold as part of a wider plan to invest only in assets that can produce premium quality coal from a low position on the cost curve. The timing of Anglo American’s review of its coal portfolio is yet to be determined, the company said.

Callide is the company’s second-biggest coal mine in Australia with production of 5.4 million t in the first nine months of last year. Output from Dartbrook has been suspended since 2007.

Anglo American has six coal mines in Australia, including its 70% owned Foxleigh venture in Queensland producing about 2.5 million tpy of the pulverised coal injection grade. The company owns a third of the Cerrejon thermal coal mine in Colombia, around 10 mines in South Africa and a 24.2% stake in the Richards Bay Coal Terminal.

According to Bloomberg, Anglo American will sell the Foxleigh mine, as well as the Dawson coal mine in north eastern Queensland, along with the Callide and Dartbrook mine.

Jacqui Strambi, a spokeswoman for Anglo American in Brisbane, declined to comment on the sale of the Dawson and Foxleigh mines, but confirmed the company is reviewing its coal assets.

The Dawson mine produces coal for power plants, as well as metallurgical coal used in steelmaking. The Foxleigh mine also produces steelmaking coal.

Anglo’s Australian coal mines produced about 14.7 million t of metallurgical coal and 8.5 million t of thermal coal in the first nine months of 2014, the company said in an October production report. Dawson produced 3.2 million t in the period and Foxleigh 1.5 million t, it said.

The possible sale of further coal assets come as global coal prices have fallen sharply, putting many mines into a loss-making position. This is in contrast to Anglo American's stance in late 2011 when it said it was looking at investing up to US$15 billion, mainly in its Australian metallurgical coal mines.

Anglo American last month resubmitted a revised development proposal for the Drayton South thermal coal mine in Australia after the New South Wales state government made a final ruling against the firm's proposal to expand it to 8 million tpy from 5 million tpy.

Edited from various sources by Sam Dodson

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