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Mining giant Glencore has said it will not abandon its coal business after a consultation with shareholders showed they wanted to keep the business.

When releasing its results for the first half of 2024, Glencore reported revenues of $117,091 million (€107,318.59 million), an increase of 9% over the same quarter last year.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the period amounted to US$6,335 million (EUR 5,801.5 million), a decrease of 33% compared to the same period last year.

This figure is mainly due to energy markets slowly returning to some stability following the volatility and disruption caused by the Russian invasion of Ukraine and the wars between Israel and Hamas.

The company reported a net loss of $233 million (€213 million) in the first half of 2024, a significant turnaround from profits of $4,568 million (€4,183 million) in the first period last year.

Maintain interest in coal

Glencore’s decision to hold on to its coal business comes after the overwhelming majority of shareholders the company spoke to supported the decision, largely because coal can still generate significant profits. The relative weakening of environmental, social and governance (ESG) investment has also contributed to the strategy.

Revenues from the ongoing coal business are expected to benefit Glencore’s investments in its transition metals portfolio, such as its copper projects. These revenues are also expected to increase shareholder returns.

The company’s CEO, Gary Nagle, said in the company’s half-year report: “We are pleased to report strong strategic successes for the group so far this year. Our industrial portfolio was further streamlined with the sale of our Volcan interest and strengthened with the addition of a 77% interest in Elk Valley Resources (EVR).”

“Critically, we have also clarified the immediate future of our coal and carbon steel business. Following completion of the acquisition of EVR in early July, we undertook extensive consultation with shareholders and, based on the outcomes of this process and the analysis of the Group itself, the Glencore Board, taking into account both the risk and opportunity scenarios, supported the retention of the coal and carbon steel business rather than a spin-off as this currently represents the optimal path to demonstrable and realisable value creation for Glencore shareholders.”

Glencore also announced that it would stop stockpiling cobalt, a key battery metal. The company had already bought significant quantities of the metal in the first half of last year as the largest producer, the Democratic Republic of Congo (DRC), increased its production.

The cobalt market may experience oversupply in the next 18 to 20 months, he added.

Glencore fined $152 million in Swiss bribery case

Glencore was also recently fined $152 million (€139 million) in a 2011 Swiss bribery case for failing to prevent a business partner from bribing a Congolese official. Although Glencore has not accepted the results of the investigation, the company previously said it would not appeal or contest the fine in order to resolve the matter quickly.

Glencore Chairman Kalidas Madhavpeddi said in a statement: “Glencore is pleased to have concluded these investigations into matters that occurred over 13 years ago. This concludes the last of the previously disclosed government investigations into past misconduct.”

“The two independent compliance monitors appointed by our resolutions to the U.S. Department of Justice began their work in mid-2023. We have invested significant effort and resources to facilitate constructive engagement with the monitors and their teams. We have begun implementing their recommendations from their first report and look forward to continuing to work with them throughout the remainder of their three-year term to continually improve our program.”