Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Glencore has ditched a plan to spin off its coal business after shareholders objected to a proposal that would have seen the highly profitable but polluting division listed in New York.
More than 95 per cent of the investors it had consulted favoured retaining the business, Glencore said on Wednesday.
Coal has enjoyed a resurgence in recent years, making it a major profit engine for the commodities trading group and helping to send its shares to a record high in early 2023.
“The ESG pendulum has swung back over the last nine to 12 months,” said chief executive Gary Nagle. “They [shareholders] recognise that cash is king.”
The move to spin off the coal business would have marked the most radical restructuring of Glencore since it bought mining group Xstrata more than a decade ago.
As part of the spin-off plan drawn up by Nagle last year, Glencore would have combined its own coal business with the steelmaking coal division of Canada’s Teck Resources, which it acquired a majority stake in for $6.9bn, and floated it in New York.
Glencore had argued that splitting the business between coal and metals would have created more value for shareholders of both businesses.
Nagle started his 23-year career at Glencore in the coal business, rising to become the head of the business shortly before his appointment as chief executive in 2021, succeeding Ivan Glasenberg.
Glencore has long insisted that publicly listed mining groups are better placed to responsibly run down coal mines as the world decarbonises, rather than selling them to privately held companies that escape scrutiny.
The abandonment of the plan came as Glencore reported underlying profits of $6.3bn for the first half, matching analysts’ forecasts, and revenues of $117bn.
Shares in Glencore were little changed in early trading on Wednesday.
