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–Shares of Thungela Resources fell on its stock market debut after a research group claimed the company’s coal mines were of no value
–A report from Boatman Capital said the environmental liabilities of the Anglo American spin-off company could be three times higher than expected.
–An Anglo American spokesperson said Thungela’s environmental provision is the industry standard and the sums alleged by the report are artificially inflated
By Joe Hoppe
The shares of Thungela Resources Ltd. fell on their first day of listing on Monday after researcher Boatman Capital claimed the Anglo American PLC spin-off was underestimating its environmental responsibilities and called the company’s coal mines worthless.
Shares of Thungela in London at 11:49 GMT fell 32.0 pence, or 21%, to 118.0 pence, after falling 27% earlier in the session. Anglo American shares in London fell 60.5 pence, or 1.9% to 3,194.0 pence.
Shares in the South African coal firm, listed in London and Johannesburg on Monday, collapsed after short seller Boatman Capital issued a report alleging the company’s environmental liabilities could be three times greater than those previously announced, which would make them higher than those of the listed company. worth 3.4 billion rand ($ 253.3 million) when it went public. Boatman Capital also said that Thungela’s financial model places a zero value on the company.
The short seller said he believes Thungela has massively underestimated the cleanup responsibilities associated with shutting down its mines, which still have five to 11 years of expected lifespan. He also said that new regulations, which will impose stricter standards on the mining industry, will significantly increase environmental sourcing.
“We anticipate that the company will be able to pay dividends initially through price support and Anglo’s dowry, but we believe that beyond that point the dividends will be unsustainable and the true value of the company will become evident.” said Boatman.
An Anglo American spokesperson said that Thungela’s ZAR 6.45 billion clean-up supply goes beyond regulatory guidelines for minors in South Africa and meets industry standards, and that the provisional amounts provided by Boatman were arbitrary.
“The funding basis under South Africa’s draft NEMA regulations simply does not accurately reflect the actual or probable amounts required to meet these obligations. It is precisely because these sums are considered artificial and arbitrarily inflated that the project has remained under study. since 2015, “said the Anglo American spokesperson.
The new NEMA rules were due to come into effect on June 19, but the date was pushed back to June 2022 by the South African government after miners raised objections. Boatman estimated that Thungela’s total end-of-life environmental costs could reach ZAR 18.8 billion.
“This is an industry-wide problem in South Africa, so the regulations on which the Boatman report apparently draws its conclusion are far from finalized,” the spokesperson added.
Write to Joe Hoppe at [email protected]
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