The giant Glencore accelerates its transition from coal to metals

Between the climate and profits, Glencore seems to have resigned itself. The commodities giant announced Tuesday that it would close 12 coal mines by 2035, even though these mines have become cash machines due to soaring fossil fuel prices.

According to the London-listed Swiss group, the acceleration of the timetable is necessary to achieve its carbon reduction targets. Glencore is committed to halving its greenhouse gas emissions by 2035 across all scopes (Scopes 1, 2 and 3), i.e. whether these emissions are direct or indirect. The group is aiming for carbon neutrality by 2050.

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Coal is the most polluting fossil fuel in the world. It is the second most polluting energy source after oil, still accounting for 27% of the world's primary energy supply. It is responsible for 40% of the world's greenhouse gas emissions.

A real turning point

This is a real turning point in Glencore's business model. Coal is expected to generate $16.7 billion in earnings before tax, depreciation and amortisation (Ebitda), more than half of the group's total Ebitda.

Coal prices have soared to more than $400 a tonne, up from around $50 before the energy crisis. The trading giant also announced that it was abandoning plans to open a new coal mine in the Queensland region of Australia.

The group plans to develop a copper mine project in Argentina

This controversial mine would have been one of the largest in the country, which is itself one of the world's leading exporters. The site would have been able to extract 20 million tonnes over 37 years, its planned life. The project was estimated to cost $1.3 billion.

The coal mines "will be closed in a responsible manner, with a just transition", assured the new CEO Gary Nagle, who started his career in coal mining. Glencore is also a mining company that extracts copper and nickel, metals much sought after as part of the energy transition.

"We will prioritise future metals for our capital expenditure. It is clear that this is where the business is happening," the executive said.

The demand for metals to deploy low-carbon technologies is such that the group anticipates a shortage of copper in the coming years. To meet these growing needs, Glencore is considering developing the El Pachon project, a $5.6 billion copper mine in Argentina. "When prices are high, when the world is crying out for the copper it needs, that's when we will bring this new supply to market," the executive warned.

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