South32 now expects South African thermal coal exit after March quarter

Australia's South32 Ltd said on Monday sale process of its South African thermal coal business is now expected to be completed after the March quarter, amid contract negotiations between the miner and electricity generator Eskom.

South32 announced the sale of the business to South African coal firm Seriti Resources Holdings in November 2019 in a deal that is expected to improve its balance sheet as investor pressure and climate change concerns prompt businesses to limit their exposure to fossil fuels.

The deal has taken longer to close than anticipated, as the Perth-headquartered firm had initially forecast the process to end in 9 to 12 months.

South Africa's antitrust tribunal in December approved the sale, clearing a key hurdle for sealing the deal.

However, terms are yet to be agreed upon for a supply deal between South32 and South African electricity generator Eskom, the largest consumer of thermal coal in the country.

Work is progressing between the miner, Seriti and Eskom to finalise arrangements that will allow for the satisfaction of the final material conditions to the deal, South32 said in its statement.