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Glencore has ditched a plan to spin off its coal business after shareholders objected to a proposal that would have seen the highly profitable but polluting division listed in New York.
More than 95 per cent of the investors it had consulted favoured retaining the business, Glencore said on Wednesday. Coal has enjoyed a resurgence in recent years, making it a major profit engine for the commodities trading group.
“The ESG pendulum has swung back over the last nine to 12 months,” said chief executive Gary Nagle. “They [shareholders] recognise that cash is king.”
As part of the spin-off plan drawn up by Nagle last year, Glencore would have combined its own coal business with the steelmaking coal division of Canada’s Teck Resources, which it acquired a majority stake in for $6.9bn, and floated it in New York.
Glencore has long insisted that publicly listed mining groups are better placed to responsibly run down coal mines as the world decarbonises, rather than selling them to privately held companies that escape scrutiny.
The abandonment of the plan came as Glencore reported underlying profits of $6.3bn for the first half, matching analysts’ forecasts, and revenues of $117bn.