Glencore separates coal production results as decision on demerger looms

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

Glencore is set to announce whether it will demerge its coal assets in its half-year financial review next week.  

Glencore completed the acquisition of EVR on 11 July 2024, with the move expected to increase its production of steelmaking coal to 19–21 million tonnes.  

CEO of Glencore Gary Nagle commented: “We are now in the process of consulting with shareholders to assess their views regarding the potential demerger of our coal and carbon steel materials business. 

“We expect to be able to announce the outcome of such engagement and the decision of the Board… next week.” 

According to media reports, Glencore’s investors are in favour of the company continuing to mine coal instead of it being moved to a separate business. While the potential demerger could lead to a slight increase in Glencore’s share price, separated assets could run for longer with less investor oversight, potentially leading to a worse climate outcome. Glencore has already pledged to “responsibly” run down its thermal coal assets.  

A spokesperson from investment consultancy Jefferies said that a coal demerger for Glencore is “highly unlikely”, according to Reuters. Glencore’s coal production in the first half (H1) of 2024 decreased by 7% compared with the same period in 2023. This fall was anticipated, however, due to scheduled mine closures, the temporary impacts of the longwall move in Australia by 2024 and rail constraints in South Africa.  

The company’s H1 copper production was down 2% year on year to 462,600 tonnes. Glencore also reported lower production numbers for nickel, zinc and cobalt.