South32 prepares to spin off South African coal assets within six months
South32's South African coal assets will be spun off within six months, its president and chief operating officer Mike Fraser said.
Fraser said that South32, which was spun out from BHP Billiton in 2015, had received a number of offers for the assets which it up for sale in November last year as part of a shift away from coal.
"After we made the announcement there was significant interest already from both listed and unlisted entities," Fraser told Reuters on Tuesday at a mining conference in Cape Town.
Fraser declined to name the bidders for South 32's coal assets but South African power utility, the main customer for the coal, requires any new contracts to be signed with suppliers that have more than a 50 percent black shareholding.
South Africa's government and mining companies have often been at odds over "black economic empowerment" which was established to redress the imbalances of white apartheid rule and Fraser said South32 would rather sell its coal business to a black-owned buyer.
"We recognise that this business is much better placed if it is majority black-owned. There is no doubt about it. Not just because it meets Eskom’s requirements, but also because it’s the right thing to do," Fraser said.
In January, Anglo American sold the last of its South African domestic coal assets to majority black-owned firm Seriti Resources.
South32 remained committed to its existing operations in South Africa which include aluminium and manganese, Fraser said.
"Our priorities are swinging very much towards base metals".
(Reporting by Zandi Shabalala; editing by Alexander Smith and David Evans)