With the world burning more coal as Russia’s war in Ukraine plunged global energy markets into chaos, commodities giant Glencore Plc pulled in a record $34 billion in profit last year. Gary Nagle, its boss, makes no apologies for more than half of that windfall coming from coal. At the same time, he also wants investors to focus on the minerals needed for a battery-powered future: copper, cobalt and nickel. “We must transition,” Nagle says. “It’s the responsibility of those involved in the business.”
Under Nagle, who took over in 2021, the shift away from coal won’t be fast. When the world committed to the Paris climate targets and investors started urging corporate leaders to embrace environmental causes, Glencore proposed a gradual exit from coal mining, while its chief rivals— BHP Group Ltd. and Anglo-American Plc—promised a quick departure. “Coal is a necessary fuel for today,” says Nagle in a boardroom at Glencore’s headquarters near the lakeside Swiss town of Zug. “It provides stable base load power, particularly for the developing world.”
Coal has traditionally vied with copper as Glencore’s biggest driver of earnings. Last year high coal prices meant it contributed $17.9 billion, compared with $5.7 billion for copper. Glencore’s strategy to stick with coal while also pursuing the commodities of the future has drawn criticism, and as the impacts of climate change mount, its coal profits will continue to be condemned by environmentalists and investors alike. “It’s a tricky situation,” says RBC Capital Markets mining analyst Tyler Broda. “There’s going to be a sort of persistent pressure on the company, whether to divest or just continue with the strategy.”
