Home industry metals-and-mining Glencore Abandons Coal and Carbon Steel Demerger, Opts to Retain Assets amid Shareholder Feedback
Metals And Mining
CIO Bulletin
2024-08-08
Glencore reverses demerger plans for coal and carbon steel, focusing on internal investment and sustainability goals.
The massive global commodities company Glencore has made a major shift of course by deciding to keep its coal and carbon steel materials division and scrapping its previous intention for an a demerger After speaking with shareholders and determining that maintaining the assets within the group would result in financial benefits, the company decided to change its original plan to sell off these subsidiaries into a distinct corporation.
In its original demerger plan, Glencore intended to combine its coal operations with its recently acquired interest in Teck Resources' metallurgical coal division, Elk Valley Resources (EVR), to form a stand-alone entity. However, shareholder feedback indicated a preference for retaining the cash flow from coal production to reinvest in other areas, such as copper and transition metals.
Chairman Kalidas Madhavpeddi highlighted that the decision to retain the ferro-alloys business, including chrome, vanadium, and manganese assets, enhances Glencore’s portfolio by improving cash generative capacity and funding options for copper growth. Despite the reversal, Glencore remains committed to its sustainability objectives, including reducing emissions from coal operations and investing in cleaner energy technologies.
The company also plans to gradually decrease its thermal coal business in line with its broader sustainability goals.
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