Anglo coking-coal mine blaze to have months-long impact
A fire at Anglo American Plc鈥檚 biggest metallurgical coal project in Australia halted production, with the miner saying it may take months for it to be extinguished. Anglo, which is seeking to sell the mine as part of a turnaround plan, fell as much as 4%.
A methane explosion on Saturday caused the fire at the Grosvenor underground mine, which accounts for about 30% of the company鈥檚 annual production of coking coal in Queensland state, Anglo said in an emailed statement Monday. No one was injured.
The blaze may complicate the London-based company鈥檚 plan to sell its assets that mine the steelmaking fuel, after it rebuffed a $49 billion takeover by BHP Group. After the world鈥檚 biggest miner walked away in May, Anglo chief executive officer Duncan Wanblad announced a radical overhaul and restructure of the business, with analysts anticipating a swift sale of the coal portfolio due to its relatively high value.
Anglo鈥檚 shares fell as much a 4% in London and traded 3.1% lower at 2,423.50 pence by 8:30 a.m.
鈥淭he mine team is working with specialist teams from the Queensland Mines Rescue Service and the regulatory authorities to extinguish the underground fire, prior to being able to assess the steps toward a safe re-entry into the mine,鈥 Anglo said in the statement. 鈥淭hese procedures are expected to take several months as a result of the likely damage underground.鈥
The fire could mean the sale of Grosvenor and the nearby Moranbah North coal project 鈥 among Anglo鈥檚 five mines of the fuel in Queensland 鈥 will take longer than expected and the bidding price will be lower, Jefferies analyst Christopher LaFemina said in a note on Monday. The researcher had expected those two mines to fetch about $3 billion.
The expected cut to production due to the fire would weigh on Anglo鈥檚 share price and the asset sale, RBC Capital Markets analyst Marina Calero said in a note.
Grosvenor reached first output in 2016 but was closed in mid-2020 after an explosion which seriously injured five workers. It only returned to production in February 2022.
The coal beds Anglo mines contain a relatively high level of methane. Anglo drains approximately 60% of the methane gas from the seams and then supplies it to the Queensland electricity grid.
(By Paul-Alain Hunt and Victoria Cavaliere)
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