Glencore has reached agreement with its joint venture partners BHP and Anglo American to acquire their respective 33.3% interests in the Cerrejón thermal coal in Colombia.
The Swiss company expects to pay $588 million in cash for the combined 66.6% stake owned by Anglo and BHP when the deal completes in the first half of 2022.
Mark Cutifani, Chief Executive of Anglo American, commented: “Today’s agreement marks the last stage of our transition from thermal coal operations. During that transition, we have sought to balance the expectations of our wide range of different stakeholders as we have divested our portfolio of thermal coal operations, in each case choosing the exit option most appropriate for the asset and its distinct local and broader circumstances.”
Glencore is committed to achieving the goals of the Paris Agreement
“Glencore carefully considered how best to respond to the sale notices in a manner which reflects our commitment to achieve the goals of the Paris Agreement and acknowledging our obligation to act as a responsible steward of assets,” the company said in a statement.
“Based on our long-term relationship with Cerrejón and knowledge of the asset, we strongly believe that acquiring full ownership is the right decision and the progressive expiry of the current mining concessions by 2034 is in line with our commitment to a responsible managed decline of our coal portfolio. Production volumes are expected to decline materially from 2030.”
Glencore has reviewed the impact of owning 100% of Cerrejón and is confident its climate commitments will not be compromised by the partner buy-out. The company has further reviewed its planned fossil fuel production profile and is now able to commit to more aggressive total emission reduction targets as follows:
- increasing its medium-term absolute total emissions reduction target (Scope 1+2+3) from 40% to 50% by 2035 on 2019 levels1; and
- introducing a new short-term reduction target of 15% by 2026 on 2019 levels.
Glencore’s focus remains its total emissions footprint, including scope 3 emissions, which is critical in order to achieve the goals of the Paris Agreement. Glencore continues to prioritise capital allocation towards commodities essential for the transition to a low carbon economy.
Ivan Glasenberg, CEO, Glencore:
“Glencore has been involved with Cerrejón for more than 20 years. We know the asset well and believe that we are the most responsible steward for Cerrejón at this stage of its lifecycle. Disposing of fossil fuel assets and making them someone else’s issue is not the solution and it won’t reduce absolute emissions.
"We are confident we can manage the decline of our fossil fuel portfolio in a responsible manner that is also consistent with meeting the goals of the Paris Agreement, as demonstrated by our strengthened total emission reduction targets.”