Glencore shifts on coal with shareholder support

Glencore will retain its coal and carbon steel materials business after receiving backing from shareholders, citing opportunities to fund its transitioning metals portfolio.

With its acquisition of a 77% interest in Canadian coal miner Elk Valley Resources in July, Glencore intended to demerge the combined business within 24 months from close.

Following the acquisition, Glencore consulted shareholders to assess views regarding retaining or demerging the business, with over 95% of consulted Glencore shareholders supporting retention.

Glencore says shareholders do not see a demerger as ESG positive given the wide support for its latest Climate Action Transition Plan (CATP) and the important role that steelmaking coal plays in supporting infrastructure needed for the energy transition.

Glencore chairman Kalidas Madhavpeddi says retention offers the lowest risk pathway for value creation for shareholders.

“The expected cash generative capacity of the coal and carbon steel materials business significantly enhances the quality of our portfolio, by commodity and geography and broadens our ability to fund our strong portfolio of copper growth options as well as accelerate shareholder returns,” he said.

Glencore recognises that the transition away from steelmaking coal for steel production will be slower than thermal coal.

Thermal coal operations will continue to decline over time, in line with approval of the 2024-2026 CATP by more than 90% of voting shareholders.