Glencore bends to pressure on climate change

Bloomberg

One of the world’s biggest sellers of coal is yielding to investor pressure on climate change, the clearest sign yet that movement is sweeping the natural resources industry.
Glencore Plc has promised to limit coal production and align the business with Paris climate targets. It’s a surprising about-face from a company that’s spoken glowingly of coal in the past and snapped up major Australian coal mines from rivals that were exiting the industry.
More broadly, the move shows that business forces are aligning on climate change in ways that will reshape energy and mining for years to come, even with US President Donald Trump steadfast in his commitment to expanding the coal industry. The anti-coal movement has already led the biggest miners in the world to exit the business or pledge not to invest, and oil producers have vowed to cut greenhouse gas emissions.
“We’ve been going through all the issues, it’s been a lengthy period,” said Glencore Chief Executive Officer Ivan Glasenberg. “We have found a resolution where both parties are happy, it makes sense, we think we’re doing the right thing.”
For Glasenberg, coal is personal. The 62-year-old billionaire South African started his career arranging coal shipments in Johannesburg in the early 1980s, when the company was called Marc Rich + Co AG. He rose through the trading ranks to eventually run the coal book.
However, Glencore is far from abandoning the dirtiest fossil fuel. In fact, coal remains the chief money maker among its industrial assets.
In recent years, as other companies retreated from coal, Glencore ramped up the business by picking up mines in Australia.
“Limiting ourselves with no further growth will tighten up supplies. It should bode well for prices,” Glasenberg said. “It’s one of the commodities in the world where there is no big increase in new supply.
Higher prices would deliver even more profit for Glencore, which mines and trades about 20 percent of global traded coal.