Source: Institute for Energy Economics and Financial Analysis
Australia’s largest coal miner Glencore will cap its global coal output at current levels in the wake of pressure from activist shareholders as part of a pivot towards minerals used in renewable technologies.
The miner announced on Wednesday night that, while it will continue mining thermal coal, which is used in power stations, and coking coal, which is used for making steel, it will limit production to current levels.
“We aim to prioritise capital investment to grow production of commodities essential to the energy and mobility transition and to limit our coal production capacity broadly to current levels,” the company said as part of its results announcement.
Glencore set its guidance for 2019 at 145 million tonnes of coal globally. Glencore said it would examine its membership of trade associations to ensure those groups aligned with the Paris climate agreement and Paris goals. These associations include the Minerals Council of Australia.
In 2017, Glencore became Australia’s largest coal miner after it acquired 49 per cent of Rio Tinto’s Hunter Valley Operations for about $US1.14 billion ($1.59 billion). It then bought Rio Tinto’s interest in Queensland coal mines giving it a total local output of more than 88 million tonnes. The deals have helped put Glencore in a dominant position in the Asia Pacific market for high-quality thermal coal.
Emma Herd, chief executive of the Investor Group on Climate Change, said: “Glencore’s announcement is a significant step for the mining sector with potentially wide-reaching implications … Investors will now be looking for more companies in the sector to align their business decisions with the Paris Agreement”