One of the biggest players in the global mining industry, Glencore, says it will shut down 12 coal mines by the year 2035.
Glencore said, as the biggest natural resources business, it planned to close the mines as it released its annual results on Wednesday.
The mining company, Glencore said with 12 coal mine closures in the next 12 years, it was on track to reduce its Scope 1+2+3 CO2 emissions by at least 15% by 2026 and by 50% by 2035.
On behalf of the Swiss commodities company, CEO Gary Nagle said it’s important to transform their operations into modern times and decarbonise.
“It’s critical in today’s world, as the world continues to decarbonise. We believe it’s our responsibility to help promote that (energy) transition and ensure that those areas that require us to use fossil fuels do so in a responsible manner,” he said.
The coal miner announce that its coal business was expected to make profits of about $16.7 billion (R290bn) in earnings before interest, tax, depreciation, and amortisation (Ebitda) next year, even though thermal coal prices had eased recently.
Independent Media Online reports that Glencore’s coal production was expected to be flat between 2022 and 2025.
It is expected to generate group earnings before interest, tax, depreciation, and amortisation (Ebitda), of $28.7bn in its 2023 financial year, and free cash flow would total $14.6bn.
While focusing on that, Glencore said there would be a modest decline in copper production from other Glencore departments and operations as it forecast a global structural shortage of copper in the coming years.
“Over the next eight years, global copper demand will outstrip supply by 50 million tonnes each year,” Nagle said.
Furthermore, Glencore the decision to close coal mines was also based on the costs for zinc and nickel production which were expected to increase slightly next year, mostly due to higher energy costs.
The group also said it could spend close to $6bn on mergers and acquisitions (M&A), which would potentially be strategic for the company in terms of infrastructure and where they were situated.
“We can’t comment too much on M&A opportunities. These are real opportunities that, if the opportunity arises, we would execute on,” Nagle concluded.
