A stacker-reclaimer operates next to stockpiles of coal as a rainbow forms in a spraying jet of water at the Newcastle Coal Terminal in this aerial photograph taken in Newcastle, Australia.
Brendon Thorne | Bloomberg | Getty Images
Glencore will not spin off its coal business after securing backing from the majority of its investors who see lucrative earnings from the fossil fuel after the commodities giant’s recent acquisition of Teck Resources’ coking coal assets, it said on Wednesday.
Lack of investment in new coal assets and a realization that the fuel will remain part of the global energy mix for years to come is likely to underpin tight supplies and high prices which investors expect will continue to boost Glencore’s profits.
The London-listed miner had been canvassing investors on whether to keep the combined coal assets or spin them off after it completed a deal to buy the majority of Teck’s steelmaking coal business last month.
Retaining the coal assets “offers the lowest risk pathway to create value for Glencore shareholders today,” Glencore Chairman Kalidas Madhavpeddi said.
Glencore reported a net loss attributable to equity holders of $233 million, after recognizing $1.7 billion in significant items, including about $1 billion of impairment charges.