London-listed royalty and streaming company Anglo Pacific Group PLC’s chief executive Julian Treger said on Wednesday that the company is open to selling its thermal coal royalties to transition away from the polluting fossil fuel and boost its environmental, social, and governance (ESG) credentials.
Royalties, a form of mining financing, are payments that give the owner the right to receive a percentage of production from a mining operation or retain a stake in it, in exchange for upfront payments to the producer.
Focus on battery metals portfolio
The mining streaming company CEO said that the company plans to add more battery metals, including lithium, manganese, and copper, to its streaming and royalty portfolio and decrease its reliance on coal and steel in order to lure a broader base of investors.
Cobalt mine acquisition
Anglo Pacific said that it has started this transition to cleaner resources by purchasing a stake in cobalt production from Vale’s Voisey’s Bay mine in Canada for $205 million. Cobalt is another metal used to make batteries for electric vehicles. Cobalt prices had quadrupled in the past two years.
Coal and steel exposure down to 20%
The company’s current exposure to coal and steel has gone down to around 20% with the cobalt mine acquisition when compared to the previous exposure of 50%. Treger said that the company aims to take that “well below 20% by the end of the year via further acquisitions.”
The company’s 2020 revenue from Narrabri in Australia, the company’s main thermal coal asset, was less than 10%.
The company announced that it is also working on a base metals transaction that will require an upfront payment of $50 million.