Thungela Resources will operate four open-pit mines and three underground mines.

The spinoff allows Anglo American to continue its transition away from thermal coal, Anglo American Chief Executive Mark Cutifani said. Following completion of the separation, which will be voted on by shareholders on May 5, 100% of the issued share capital of Thungela will be held by Anglo American shareholders who will each receive one Thungela share for every 10 Anglo American shares.

Thungela will hold 90% of the thermal coal operations in South Africa with the remaining 10% held collectively by the employee partnership plan and the community partnership plan. “Thungela is a leading South African producer of high-quality, low-cost export thermal coal, well positioned to benefit from improved market conditions, and providing a reliable and affordable energy source to our customers mainly in developing economies,” Thungela CEO July Ndlovu said. “We have significantly repositioned and upgraded our portfolio in recent years into a highly competitive producer of export product, with established access to world-class export infrastructure.”

Anglo American’s marketing business will continue to support Thungela in the sale and marketing of its products for a three-year period with an additional sixmonth transitional period thereafter.