CTO metallurgists are trying to sell their company’s core brands of coal, oil and natural gas to finance a shift in business models that could make the fuel a more attractive investment, analysts say.
The company’s coal and oil assets include refining and refining-related assets, including its refineries in the U.S. and Europe.
That would help offset the costs of coal mining and the associated environmental and safety issues.
The companies are also seeking to sell other assets including its petrochemical and energy-related businesses, which are worth $1.8 billion to $2.4 billion.
“We are looking for an opportunity to diversify our portfolio, to focus on higher-margin businesses and make our products more attractive to investors,” said Todd Rizzuto, the company’s chief financial officer, in an interview.
The plan includes selling its petrodiesel unit, which is made from a blend of diesel fuel and petroleum-based plastics.
A separate business would focus on refining the petrochemicals it sells.
The company is also considering selling its steel-making business, which makes steel parts and components, but has no current plans to do so.
While the refineries are in the refining business, Rizzato said the company is interested in refining coal for energy.
“In order to be competitive with our competitors, we need to be able to make coal, as opposed to oil and gas, and coal-fired power plants more attractive,” Rizzito said.
The U.K.-based company’s refineries, which have been refining coal at a rapid pace since the mid-1990s, accounted for more than 80 percent of its refining capacity in 2016, according to the U-K.
It has also recently become increasingly focused on refining petrofuels, a major segment of the U,S.
market, as the cost of crude oil has fallen and the global economy has stabilized.
That shift could also help the company attract customers in Asia, where it competes with companies such as Exxon Mobil and Chevron.
While coal prices have fallen over the past two years, their price per barrel has not.
“If you look at the fundamentals of the market, it looks very good,” Rizio said.
“The commodity price is still in the higher-priced range.”