Anglo American shares fall after Australian mine suspension

(Reuters) – Shares in Anglo American (JO:) slid 3% on Monday after the miner suspended production at its Grosvenor steelmaking coal mine in Australia following an underground fire that broke out over the weekend.

Anglo American said on Sunday it was battling an underground fire at the mine in Australia’s Queensland state after a blaze ignited there on Saturday.

“We believe this incident could have negative implications for the timing and execution of Anglo’s corporate restructuring plan and therefore future potential corporate outcomes for Anglo,” JP Morgan analysts wrote in a note.

Other analysts said the suspension could delay the sale of Anglo’s coal assets and hit its valuation as the Australian metallurgical coal assets were the ones the market was expecting management to be able to divest most quickly.

According to analysts at Jefferies, Grosvenor accounts for about 30% of the $4.5 billion value the brokerage attributes to Anglo’s steelmaking coal business.

The London-listed miner had in May outlined a plan to divest less profitable assets and focus on expanding output after BHP’s failed attempt to takeover the company.

Anglo shares underperformed the wider in early Monday trade. They were the biggest percentage losers on the London bluechip index.