COMPANY NEWS IN BRIEF

Tesla cars for first time on Chinese government purchase list

Tesla's best-selling Model Y was included in a list of electric and plug-in hybrid models that a local government in China can purchase as a service car, according to the official Chinese media outlet the Paper on Thursday.

It was the first time Tesla's cars have been made eligible for government purchases in China, the Paper added.

China's eastern Jiangsu provincial government published 56 batches of new energy vehicle procurements for use as service cars by party, government and public organisations in a government statement on June 6.

Apart from the Model Y made in Tesla's Shanghai factory and Volvo Cars' XC40, the other 54 batches were all Chinese-branded EVs and hybrids. Volvo Cars is owned by Chinese automaker Zhejiang Geely Holding Group.

Neither the government nor the Chinese media specified the number of Model Y cars that the Jiangsu provincial government could buy.

Tesla's cars were banned from entering some government and military compounds in China.

The restrictions were removed after it won an endorsement from the country's top auto industry association that said in April the data collection by Tesla fleets in China was compliant.

As demand for Chinese cars abroad is overshadowed by the prospect of tariffs and domestic competition intensifies, Tesla's deliveries of China-made vehicles fell 9% in the first half compared to the same time in 2023.

The restrictions were removed after it won an endorsement from the country's top auto industry association that said in April the data collection by Tesla fleets in China was compliant.

As demand for Chinese cars abroad is overshadowed by the prospect of tariffs and domestic competition intensifies, Tesla's deliveries of China-made vehicles fell 9% in the first half compared to the same time in 2023.

Tesla CEO Elon Musk's trip to China in late April to meet Premier Li Qiang, however, appears to have paid off.

China has increased its support for Tesla, which plans to build a data training centre and roll out its Full Self Driving software in the country this year, despite ongoing tensions with the United States over tech rivalry.

-REUTERS-

Anglo considers options to sell coal assets after fire

Anglo American is considering options to push ahead with a sale of its coal business after an explosion at its flagship Australian mine, including the possibility of selling individual assets or excluding the damaged operation from a potential deal.

The plan to exit coal formed part of a dramatic restructuring programme announced earlier this year by Anglo, as the London-based miner was trying to fend off a takeover pursuit by larger rival BHP Group.

While it also intends to spin off its platinum unit and either sell or separate diamond miner De Beers, the company had been planning to tackle the coal sale first, seen internally and by investors as the most easily achievable part of the restructuring. Anglo has said it already received interest in the assets and a deal for the highly attractive coking coal mines in Australia would have demonstrated early progress to investors looking for signs that Anglo’s go-it-alone approach offers better value than the rejected bid from BHP.

The plan was thrown into question on Saturday when an methane explosion deep underground started a huge fire at Anglo’s Grosvenor coal mine in Queensland. It’s likely to be several months before the company is able to safely re-enter the mine, let alone restart mining.

Anglo rose as much as 2.1% in London to 2,447 pence. The stock slumped as much as 4% Monday after news of the explosion.

Besides a sale of its coal business, Anglo is also working on plans to spin off its majority stake in Anglo American Platinum Ltd. and exit its ownership of De Beers. The company would prefer to wait for a recovery in the diamond market, the people said, as the internal view at the company is that De Beers should command a price that reflects its status as a trophy asset.

-BLOOMBERG-

SAA to add 64% new destinations as it rebuilds

South African Airways plans to add 64% new destination from its hub in Johannesburg by the end of April as it rebuilds its business to focus on regional and international routes after a deal with an investor collapsed.

The company is aiming to add nine destinations to its existing 14 and also plans to boost the number of aircraft by 50% to 21 by March, interim Chief Executive Officer John Lamola said, adding that the South African flag carrier has the cash to fund its expansion.

“We are cash positive as a company, and we are able to survive in the next 12 to 18 months on our own,” Lamola said in an interview with Bloomberg Television in Johannesburg.

“Our strategic position is to differentiate ourselves as a national flag-carrier to be able to offer the country the connectivity with key investment and trading partners.”

The airline, founded in 1934, has had rely on taxpayers for years until its bankruptcy following the pandemic. A plan by the government to sell a 51% stake in the carrier was abandoned in March, forcing the company to scale back its expansion plans. While South African Airways won’t seek bailouts, it would ask for sovereign guarantees to expand over the next three years, Lamola said.

-BLOOMBERG-