Coal is still king for Glencore but low carbon future beckons

Mining giant Glencore is sticking with mining and shipping coal despite reported comments by its chairman Tony Hayward that its coal business is in a state of ‘managed decline’.

Speaking at a video-linked industry event this week, Hayward said the company was overseeing a managed decline of its coal division, which represented roughly 25 per cent of its business.

“We are not going to sell our coal assets, but will reinvest cash coming out of the coal business to grow the base metals business to meet what we believe will be very significant new demand in those metals over the next 10 or 25 years as the world seeks to electrify,” Hayward was reported as saying in an S&P Global Platts article.

Hayward was  speaking about Glencore’s coal business in the context of its commitments to reduce its Scope 3 carbon emissions in line with the Paris Climate Accord, said Glencore in a company statement.

“We expect the depletion of our coal resource base in Colombia, and to a lesser extent, South Africa and Australia to contribute to this reduction,” said Glencore.

“Our Australian operations are expected to maintain a longer and flatter production profile and will continue to produce high quality coal, which will be required to meet expected levels of global steel production and energy demand in Asia,” it added.

Glencore’s base metals and minerals assets including cobalt, copper and nickel mines generate about 75 per cent of business revenue for the company.

Some Glencore customers, like China, have stated it is their intention to reduce their use of carbon intensive fuels like coal.