Mining titan Anglo American would be “the first to step up to the plate” to help South African power generator Eskom with its coal needs, Anglo CEO Cynthia Carroll told Mining Weekly Online on Friday.
The diversified miner also had plans to invest $4,8-billion in South Africa, she said in response to Mining Weekly Online in a media conference call.
Carroll was replying to journalists’ questions after reporting a 97% surge in earnings before interest, taxes, depreciation and amortisation, to $12-billion in the 12 months to December 31.
In addition to the $4,8-billion capital investment in iron-ore, platinum and coal, Anglo was also considering new capital investments in diamonds.
Earlier this month, Eskom drew attention to its potential coal shortfall and Mineral Resources Minister Susan Shabangu responded by calling on the coal-mining industry to cooperate in the meeting of Eskom’s needs.
On Eskom’s coal supply concerns and the Minister’s plea, Carroll told Mining Weekly Online that more than 70% of the thermal coal that Anglo mined in South Africa was sold into South Africa’s domestic market.
“It’s a massive portion,” she commented, adding that Anglo is the largest single supplier to Eskom.
“We supply about 30% of Eskom’s requirements,” she said, adding that Eskom was unable to use the limited volume of coal that Anglo exported from South Africa because of its particular quality.
In her discussions with Eskom, the utility had indicated that it was “very pleased with the effort that we put in”。
“We think that we’re in a solid position. If there is any change that relates to the introduction of a framework to protect South Africa’s coal reserves to ensure the nation’s requirements, we’d be the first ones to step up to the plate and ensure that we do what we need to do, to satisfy demand,” she said.
Anglo was also making progress with its New Largo coal mine project in Mpumalanga that would be supplying thermal coal to Eskom’s Kusile power station, which is currently under construction nearby.
The London-listed diversified miner was also working with Eskom on the building of a power plant to make use of its large volume of discard coal.
The power plant would be built, owned and operated by a still-to-be selected independent power producer.
“The possibilities of that are really quite exciting,” Carroll added.
Anglo executive director Godfrey Gomwe said that there was expected to be an electricity shortage in South Africa this year and next.
Gomwe said that Anglo was responding internally by becoming more energy efficient and providing near-mine communities with solar power possibilities.
He said that Anglo had a memorandum of understanding with Eskom, which was in the process of raising the balance of the R440-billion required for its power station building programme to 2017.
On how Anglo was dealing with South Africa’s coal line risk, Carroll said that Anglo was working “very closely” with State rail enterprise Transnet to ensure there was a clear understanding of the company’s current and future logistics needs.
On the company’s Kolomela iron-ore expansion, Carroll said that Anglo had been working with Transnet to ensure that there would not be any bottlenecks or delays on meeting the capacity requirements to support the export of the iron-ore to ensure that “we’re all on the same page, and that we understand the expectations”。
Despite Anglo posting a better net profit of $6,54-billion for 2010 than the analysts' forecast of $4,99-billion, its shares were down 1,9 % at ?32,33 by 09:23 Greenwich Mean Time.
"A small negative is a slightly stingy dividend - a function perhaps of the increased commitment to organic growth," Liberum Capital commented.
Anglo said that it would pay a final dividend of 40c a share, after restoring the payout with an interim dividend of 25c.
Larger peers BHP Billiton and Rio Tinto recently announced billion-dollar share buybacks.
Anglo said it had a $70-billion pipeline of more than 60 projects that has the potential to more than double production over the next decade and expected to approve $16-billion of projects in the next three years into primarily copper and coal.
"Our near-term production growth of 50% by 2015 is exceptionally strong, with four major projects making excellent progress, enabling us to start up a new mining operation every six to nine months over the next few years," Carroll said.
On the sale of Anglo’s Scaw Metals in South Africa, Carroll said that there was “a lot of interest” from potential buyers.
（source from：miningweekly.com）
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