(Adds detail, analyst comment)
JOHANNESBURG, June 7 (Reuters) - South Africa's Thungela
Resources, which was spun off from Anglo American
, is valued at roughly 3.4 billion rand ($253 million)
after listing on the Johannesburg Stock Exchange on Monday in a
test of investor appetite for coal miners.
Thermal coal miners have been struggling to find investor
favour amid growing climate concerns and a shift towards
sustainable investing, with global mining giants offloading such
assets as they transition out of the most polluting fossil
fuels.
At market open the 136 million shares in Thungela, meaning
'to ignite' in isiZulu, were priced at 25.00 rand per share
after the newly formed company listed in Johannesburg with a
secondary listing on the London Stock Exchange.
The demerger gave ownership to existing owners with
investors receiving 1 Thungela share for every 10 Anglo American
shares they hold.
"Institutional investors have been moving away from coal
mining in recent years. Investors now require many funds to
avoid polluting assets such as coal miners making it difficult
to find large cornerstone investors," said analyst John Meyer of
SP Angel.
"The performance of Thungela shares will give us a clue as
to how influential ESG is in terms of stock market investment,"
Meyer said.
"People who own Anglo American itself and were given these
shares probably don't want them. I think over the next few weeks
there will be more selling pressure on the stock," said Greg
Davies, a trader at Cratos Capital.
Anglo American spun off its South African thermal coal mines
joining the world’s largest mining company BHP Group,
Australia's South32 and global miner Rio Tinto in taking
steps to go thermal coal free.
Despite calls to exit thermal coal, countries such as China
and South Africa, which derive a majority of their power from
coal, have plans for more coal-fired power stations.
"Our conviction is that thermal coal remains part of the
energy mix for decades to come," Thungela CEO July Ndlovu said
during the listing presentation.
Coal futures at $108 per tonne are up around 32% from a year
ago, amid an economic rebound from the coronavirus pandemic and
strong demand from China.
($1 = 13.4490 rand)
(Reporting by Tanisha Heiberg; editing by Jason Neely)
Rio Tinto (RIO)
Anglo American (AAL)
