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Anglo American has completed its final exit from steam coal with the sale of its 33.3% stake in the Cerrejón joint venture in Colombia to Glencore for US $ 294 million. Glencore has also agreed to buy BHP’s 33.3% stake in the giant coal mine for the same price, giving the Switzerland-based miner and commodities trader 100% control of the asset.
Coal is losing its luster as an asset in mining companies’ portfolios due to fossil fuel’s links to the climate crisis and pollution.
Funding coal projects is becoming increasingly difficult and costly as shareholders avoid a commodity that sparked the industrial revolution and heated the planet in the process. Companies rely on so-called ESGs – environmental, social and governance issues – and that means that coal is frozen.
Anglo recently spun off its steam coal operations in South Africa into a new JSE-listed entity, Thungela Resources. With the sale of Cerrejón, the company has now completed its exit from steam coal – an exit driven by shareholders including the Pension Council of the Church of England. Anglo is committed to making all of its operations climate neutral by 2040.
Glencore said in a statement that it has “reviewed the impact of 100% ownership of Cerrejón” and is “confident that this partner buyout will not affect our climate commitments”. Its emissions reduction targets include one of 15% by 2026 at the 2019 level.
“Based on our longstanding relationship with Cerrejón and our knowledge of the asset, we firmly believe that acquiring full ownership is the right decision and that the phasing out of the current mining concessions by 2034 is our commitment to a responsible, controlled decline in our coal Portfolio.
“Production volume is expected to decrease significantly from 2030,” said Glencore.
Many greens would like to see the plug completely and immediately pulled on coal. Realistically, this will not happen overnight – such a move would have significant social and economic consequences – but the transition from coal and other fossil fuels to green alternatives is picking up speed.
Ivan Glasenberg, the South African CEO of Glencore, who will step down later this year, said: “Disposing of fossil fuels and giving them to others is not a solution and will not reduce absolute emissions.”
This is certainly true to some extent. But the challenge on this front is that it is now Glencore’s problem, not Anglo American’s. DM / BM
