: This coal spinoff has surged in value. BlackRock has profited.
Spinoffs usually perform well in the first two years after getting broken out of their parent company.
But few have succeeded more than Thungela Resources
a South African miner of thermal coal.
on Friday announced it was selling its remaining 8% stake in Thungela at a 12% discount from Thursday’s close. Thungela’s London-listed shares slipped as much as 9%, though were only 1% lower in midday trade.
More broadly, however, Thungela has surged since being spun out of Anglo American. Thungela shares have surged in value to 913 pence, after being spun out of Anglo in June at 111 pence.
The spinoff of Thungela Resources was done due to shareholder pressure rather than an attempt to unlock value. “Anglo American has been pursuing a responsible transition away from thermal coal for a number of years now,” Anglo American CEO Mark Cutifani said when the company first announced the spinoff plan.
Thungela exports thermal coal to India and other developing countries in South Asia.
Coal has stormed higher in value, first as economies recovered from the pandemic, and again more recently as energy export giant Russia has been shut out of markets due to its invasion of Ukraine.
The ICE Newcastle coal futures contract traded at $326 per metric ton on Thursday, down from its 52-week high of $440 but well above its 52-week low of $84.
Last year, Thungela swung to a profit of 6.1 billion rand ($420 million) as revenue surged to 26.28 billion rand from 3.75 billion rand.
Ironically, one of the firms that has put pressure on companies to exit the coal business is one of Thungela’s leading investors. According to FactSet, BlackRock Investment Management is the fourth-largest institutional investors in Thungela, and two other affiliates of BlackRock are in the top 15.
first made a coal divestment pledge in Jan. 2020. However, BlackRock has always allowed an exception for its passively constructed index funds, which is the majority of its funds under management.
According to the International Energy Agency, coal produces the most greenhouse gas by fuel.