Raw materials Glencore will not divest its coal business after all
Glencore is not divesting the coal and carbon steel business under discussion. In the first half of 2024, the commodities trading and mining group slipped into the red due to one-off effects and lower commodity prices. Sales, on the other hand, increased.
07.08.2024, 09:26
SDA
At the beginning of July, the Swiss commodities group received the green light in Canada for the billion-euro takeover of a majority stake in the Teck coal business. Following the takeover of the Teck subsidiary Elk Valley Resources (EVR) in Vancouver, Glencore was still in discussions with shareholders to obtain their opinion on the possible spin-off of the coal and carbon steel business.
The die is now cast: The business is to remain with Glencore. A clear majority of shareholders have expressed a clear preference for retaining the business in question, Glencore announced on Wednesday.
Long takeover battle
Accordingly, the Board of Directors decided against a spin-off. Taking into account the opportunities and risks, the Board of Directors also came to the conclusion that it made more sense to retain the business.
Glencore is known to be paying around 6.9 billion US dollars for a 77 percent stake in Teck's coal business. The deal is expected to be completed in the third quarter of 2024, according to earlier information. The deal was preceded by a long battle between Teck and Glencore: Glencore originally wanted to acquire the company outright and then spin off the combined coal business. However, Teck had resisted these plans.
Net loss due to one-off effects
In terms of earnings in the first half of the year, Glencore increased sales by 9 percent to 117.1 billion US dollars from January to June. However, operating profit (adjusted EBITDA) fell by around a third to USD 6.3 billion due to lower prices, particularly for coal. Glencore refers to a normalization in the energy markets following the high volatility in 2022 and 2023.
The bottom line was a loss of USD 233 million, following a profit of USD 4.6 billion in the same period of the previous year. In addition to the lower operating result, profit was impacted by negative one-off effects amounting to 1.7 billion, of which 1 billion alone was due to a value adjustment.
