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Anglo American (OTCQX:AAUKF) (OTCQX:NGLOY) -2.2% in London trading Monday after saying it has suspended production at its Grosvenor steelmaking coal mine in Queensland, Australia, following an underground coal gas ignition incident that caused a fire this weekend.
Anglo (OTCQX:AAUKF) (OTCQX:NGLOY) said it expects production at its biggest metallurgical coal project in Australia will remain suspended for several months given the likely damage, which would cause a significant setback to its plan to sell its steelmaking assets.
According to analysts at Jefferies, Grosvenor accounts for ~30% of the $4.5B value the brokerage has attributed to Anglo’s (OTCQX:AAUKF) (OTCQX:NGLOY) steelmaking coal business.
The fire likely means a sale of Grosvenor and Moranbah North – which share a coal-handling facility and preparation plant – will take longer than expected, and valuation likely will be lower than previously believed, Jefferies said.
Anglo’s (OTCQX:AAUKF) (OTCQX:NGLOY) coal division was expected to be the easier unit to divest, with the restructuring worries mostly concerning the platinum metals and diamond units, Jefferies said.
Grosvenor began production in 2016 but was closed in mid-2020 after an explosion which seriously injured five workers; it returned to production in February 2022.
