Glencore, one of the world’s largest globally diversified natural resource companies, announced today an acceleration in its emissions reduction goals, along with an agreement with Anglo American and BHP to acquire their stakes in their 3-way joint venture of the Colombian coal asset, Cerrejón, for $588 million.
Late last year, Glencore announced a commitment to achieve net zero emissions by 2050, along with an interim target to reduce its total emissions footprint across Scope 1, 2 and 3 by 40% by 2035 compared to 2019 levels. Following today’s announced transaction, the company said that it has reviewed its fossil fuel production profile, and updated its interim target to a 50% absolute emissions reduction of 50% by 2035, across Scopes 1-3. Additionally, Glencore introduced a new short-term reduction target of 15% by 2026 on 2019 levels.
Thermal coal is the highest carbon emitting source of energy in the global fuel mix, yet it makes up nearly 40% of the world’s energy supply. The transaction announced today marks the completion of Anglo American’s exit from thermal coal production, and aligns with BHP’s goal to reduce its own exposure in this area.
Similarly, Glencore has committed to a responsible managed decline of its own portfolio. To that end, the company stated that the acquisition of Cerrejón from its JV partners was the best alternative, rather than bringing on new partners and potentially extending the mine’s operations beyond its current concessions. Cerrejón’s current mining concessions end in 2034, and production volumes are expected to decline materially from 2030.
Ivan Glasenberg, CEO of Glencore, said:
“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.”