Anglo American (AAL.L) has shown how much shareholders hate coal. Thungela Resources (TGAJ.J), the main producer of black goods of the London-listed mining giant, started on Monday as a separate listed company with a market value of $ 250 million, just a third of the EBITDA it he is likely to win. year. This is the investor’s equivalent of an extremely long barge pole.

Despite its reputation as the most carbon-emitting energy source – and therefore the worst climate polluter – there are indications that coal has a long future. Wood Mackenzie analysts estimate that it will still account for 31% of global electricity production in 2030, mainly due to the slowness of South Asian economies to switch to green energy. And with minimal investment in new mines, there’s even an argument that supply will decline faster than demand, pushing up prices.

For companies like Thungela and its big rival Glencore (GLEN.L), that means a decade or more of money up for grabs. Liberum analysts estimate Thungela could earn around $ 750 million in EBITDA in 2021. That’s three times the company’s current value without debt. Either investors don’t think they’ll benefit from this cash flow, or the cost to reputation of accepting such a tainted profit outweighs the financial benefits.

In Thungela’s case, it’s probably a bit of both. Many Anglo shareholders who received shares in Thungela are under pressure to use their financial weight to accelerate the carbon shift. Shares denominated in the volatile South African rand and the difficult adjustment of the mining industry in the post-apartheid country offer additional incentives to sell.

The financial future of the company, meanwhile, depends not only on the demand for coal but also on the cost of definitively closing the mines. The Boatman Capital, a research firm, estimates Thungela could face a bill of $ 1.4 billion. That’s almost three times Anglo’s own estimate of expenses like long-term wastewater treatment.

Anglo denies the under-funding of these costs, and Boatman’s estimates are based on tougher South African rules for shutting down mines that are currently in draft form, which could be watered down. Yet in South Africa, as elsewhere, the political leadership of travel is against coal. This indicates more onerous regulation. The barge approach of investors has a financial and environmental rationale.

To pursue @edwardcropley on Twitter

NEWS CONTEXT

– Anglo American finalized the split of its thermal coal business in South Africa on June 7 when Thungela Resources began trading in Johannesburg and London.

– Thungela shares were trading at R23.92 at 08:30 GMT, valuing the company at $ 242 million.

– The Boatman Capital released a report on June 6 saying Thungela’s equity was worthless due to $ 1.4 billion in potential liabilities for the final closure of its mines, nearly three times the cost Anglo predicted American. Anglo American denied the under-supply.

– Anglo American shares were down 2.7% to 31.68 pounds at 9:20 a.m. GMT on June 7.