Glencore takes control of a coal mine in Colombia

Glencore announced Monday that it has bought its partners’ stake in a coal mine in Colombia. This operation represents the best way to achieve its climate objectives, which the company has also taken up.

According to a statement, Glencore will buy back, for a total of $588 million (540.1 million francs), a related 33.3% stake in the Cerezon mine in northeastern Colombia by its Australian counterparts BHP and British Anglo American. The group located in the bar, thus becomes the sole owner of the mine.

The operation is retroactively effective at the end of last year. Taking into account the site’s future operating performance, coal prices and finalizing the purchase in the first half of 2022, cash generated from the mine is expected to reduce acquisition costs by $230 million. The return on investment should be in less than two years.

The Cerrejon mine has been described as one of the largest surface thermal coal mines in the world.

Glencore believed that the buyback of its counterparties’ shares, allowing it to take control of the mine, in particular the gradual phase-out of coal, represented the best solution to meet its climate commitments. Production volumes are expected to decline by 2030 and the concession will expire by 2034.

“Selling our fossil fuel assets and delegating responsibility to someone else is not the solution and will not completely reduce” greenhouse gas emissions, said Glencore CEO Evan Glassenberg.

The company also reviewed its climate targets keeping in mind the 100% acquisition of Cerezon mine. Management has raised its medium-term emissions reduction targets (Scopes 1, 2 and 3) from 40% to 50% by 2035 compared to 2019 levels. In the short term, Glencore plans to reduce its emissions by 15% over five years still compared to 2019.

The company has also reaffirmed its commitment to the Paris Agreement on the Limitation of Global Warming.

This article was automatically published. Source: ats/awp

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