LONDON (Reuters) -Shares in Anglo American slid as much as 4% on Monday, with investors worried over what impact an ongoing underground blaze at a coal mine in Australia could have on the miner’s plan to sell its coal portfolio, part of a broader bid to add value.
Anglo has been battling a fire ignited at its Grosvenor steelmaking coal mine in Australia’s Queensland state on Saturday. There were no injuries but assessment of the damage and the re-opening of the mine might take several months.
“The underground combustion event is ongoing; however, the QMRS (Queensland Mines Rescue Service) mobile extinguisher unit is now fully operational, and smoke has visibly reduced,” it said in a statement on Monday.
Anglo’s CEO Duncan Wanblad said in May the sale process of its five operating coal mines, development projects and joint ventures in Australia was soon to kick off as part of a wider plan to divest less profitable assets and focus on expanding copper output after BHP’s failed attempt to takeover the company.
Analysts said the weekend suspension could delay the sale of the assets and hit valuation.
“We believe this incident could have negative implications for the timing and execution of Anglo’s corporate restructuring plan,” JPMorgan analysts wrote in a note.
According to Jefferies, Grosvenor accounts for about 30% of the $4.5 billion value the brokerage attributes to Anglo’s steelmaking coal business.
“The incident underground at Grosvenor is serious and it will take some time to assess the impact on the mine and implement remedial action,” Anglo said on Monday.
“We will assess the timing of the divestment process in the coming weeks but we are continuing the preparation work in the meantime,” it added.
(Reporting by Clara Denina, Yadarisa Shabong; Editing by Nivedita Bhattacharjee and David Evans)
