The company also revealed it is no longer stockpiling key battery metal cobalt anymore, after the world’s biggest supplier, the Democratic Republic of Congo raised production.
Mining giant Glencore has said it is no longer going to get rid of its coal business after a consultation with shareholders revealed they wanted it kept.
Releasing results for the first half of 2024, Glencore recorded a revenue of $117,091m (€107,318.59m), a 9% rise from the corresponding quarter last year.
Adjusted earnings for the period, before interest, taxes, depreciation and amortisation (EBITDA) was $6,335m (€5801.5m), a 33% dive on the same period last year.
The figure was mostly due to the energy markets beginning to stabilise slightly from the volatility and disruptions caused by Russia’s invasion of Ukraine and the Israel-Hamas wars.
The company saw a net loss of $233m (€213m) for the first half of 2024, a sharp reversal from the $4,568m (€4183m) profit seen in the first period last year.
Retaining an interest in coal
Glencore’s move to hold on to its coal business comes as the overwhelming majority of the shareholders it spoke to supported this decision, mainly because of coal’s potential to still yield significant profits. The relative slowing down of environmental, social and governance (ESG) investment also contributed to this strategy.
The revenues generated from the ongoing coal business are also expected to help Glencore’s investments in its transition metals portfolio, such as its copper projects. These revenues are also likely to increase shareholder returns.
The company’s chief executive officer (CEO) Gary Nagle said, in the company’s first half earnings report: “We are pleased to report strong strategic achievements for the group over the year to date. Our Industrial portfolio has been further streamlined with the sale of our Volcan stake 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 materials business. Following completion of the acquisition of EVR in early July, we undertook an extensive consultation with shareholders and, based on the outcome of that process and the group’s own analysis, Glencore’s Board, considering both risk and opportunity scenarios, endorsed the retention, rather than demerger, of the coal and carbon steel materials business, as currently providing the optimal pathway for demonstrable and realisable value creation for Glencore shareholders.”
Glencore also revealed that it would no longer be stockpiling cobalt, a key battery metal, having already bought significant supplies of the metal in the first half of last year, as the biggest producer, the Democratic Republic of Congo (DRC), had increased production.
The cobalt market could potentially see oversupply for the next 18-20 months, he added.
Glencore fined $152m in Swiss bribery case
Glencore has also recently been fined $152m (€139m) in a Swiss bribery case from 2011, where it did not prevent a business partner from bribing a Congolese public official. Although Glencore has not accepted the results of the probe, it said earlier it would not be appealing or contesting the fine, in order to speedily resolve the matter.
The chairman of Glencore, Kalidas Madhavpeddi said in a statement: “Glencore is pleased to have resolved these investigations relating to past matters that occurred over 13 years ago. This resolves the last of the previously disclosed government investigations into historical misconduct.
“The two independent compliance monitors mandated by our resolutions with the US Department of Justice began their work in mid-2023. We have dedicated substantial effort and resources to enable constructive engagement with the monitors and their teams. We have commenced implementation of their recommendations arising from their first report and look forward to continuing to work with them over the balance of their three-year term to continuously improve our Programme.”
