Glencore Maintains Production Guidance Amid Coal Business Acquisition

Multinational mining company Glencore has maintained its 2024 production guidance for most of its metals but has separated its coal production figures following its acquisition of a 77% interest in the steelmaking coal business EVR from Teck Resources.

The company is expected to announce its decision regarding a potential demerger of its coal assets in its upcoming half-year financial review next week.

Glencore completed the acquisition of EVR on July 11, 2024, a move anticipated to boost its steelmaking coal production to between 19 and 21 million tonnes.

CEO Gary Nagle stated, “We are currently consulting with shareholders to assess their views regarding the potential demerger of our coal and carbon steel materials business.

We expect to announce the outcome of this engagement and the Board’s decision next week.” Media reports indicate that Glencore’s investors are generally in favor of the company continuing coal mining operations rather than separating the business.

While a potential demerger could result in a slight increase in Glencore’s share price, it might also lead to less investor oversight, potentially exacerbating climate impacts. Glencore has previously committed to “responsibly” managing the decline of its thermal coal assets.

A spokesperson from investment consultancy Jefferies suggested that a demerger of Glencore’s coal operations is “highly unlikely,” according to Reuters.

In the first half of 2024, Glencore’s coal production decreased by 7% compared to the same period in 2023, a decline that was anticipated due to scheduled mine closures, the temporary impacts of a longwall move in Australia, and rail constraints in South Africa.

Additionally, the company reported a 2% year-on-year decline in copper production, totaling 462,600 tonnes, along with lower output figures for nickel, zinc, and cobalt.