Glencore to Consult Shareholders on Future of Coal Business Post Teck Resources Acquisition
Glencore will begin consulting with shareholders regarding the future of its coal business once its deal to acquire Teck Resources’ coal mines is finalized later this year.
Crucially, Glencore has indicated that if a majority of shareholders support retaining its coal mines, the company will not proceed with a vote on the matter.
Glencore’s coal division has been one of its most profitable segments, driving record returns in recent years. The plan to exit fossil fuels and list a new company in New York marked a significant strategic shift under current CEO Gary Nagle.
The company had long resisted pressure to divest from coal, arguing that the world still needed this energy source and that it was more responsible for Glencore to operate the mines than to sell them.
Last month, Bloomberg reported that several of Glencore’s largest shareholders believe the company should retain its coal assets.
The acquisition of Teck Resources’ coal mines is expected to close in the third quarter. Following the closing, Glencore will immediately begin consultations with investors, Nagle announced at the company’s annual shareholder meeting on Wednesday. The feedback from this consultation will guide the company’s next steps regarding its coal business.
Nagle stated that if the majority of shareholders want to retain the coal assets, there will be no need for a vote. However, if the consultation shows sufficient support for retaining coal, there will be a binding vote.
This approach would potentially allow Glencore to avoid forcing some shareholders to vote against a company proposal if they wish to keep the coal operations.
Glencore’s largest shareholders include former CEO Ivan Glasenberg, the Qatar Investment Authority, and BlackRock.
As the world’s largest shipper of thermal coal, with a market capitalization of about $75 billion, Glencore had announced plans to spin off the coal business within two years of completing the acquisition of Teck’s steelmaking coal assets.
