On 20th February, Glencore made an announcement supporting a transition to a low carbon economy, part of which will be limiting our global coal production capacity broadly to current levels.
Not surprisingly, activists, NGOs and some politicians have added their own spin and commentary suggesting that coal was dead or that as Australia’s largest coal producer we were turning our back on coal.
The decision to maintain Glencore’s attributable global coal production to around 150 million tonnes per annum was a business decision, made in response to shareholder prioritisation of climate change issues, including a number of shareholders who also belong to the Climate Action 100+ initiative.
Let us be clear - we are not moving away from coal. Glencore has a world-class coal mining business in Australia and will continue to have a world-class coal mining business.
This announcement DOES say
- that the coal business will not continue to grow above current attributable global production levels.
This announcement DOES NOT say
- that it will impact our existing business or our coal workforce of almost 10,000 people;
- that we will freeze all projects; or
- that we are exiting coal.
For the past 20 years, we have built our Australian business through acquisitions, mergers, greenfield and brownfield mining projects that today encompasses 16 coal mines across NSW and Queensland.
We will continue to consider acquisitions, divestments, expansions and projects against our investment criteria. Moving forward we have an additional investment consideration which is to manage our volumes to remain within the stated production cap.
We are continuing to pursue the next generation of coal projects, including the United Wambo project currently moving through the approval process in NSW. In Queensland, the Valeria and the Wandoan projects remain under active consideration and will be assessed against market conditions, project economics and now the coal production cap.
I am proud of the contribution we make in local communities across Australia employing a workforce of almost 10,000 people and spending $4.6 billion in goods and services from over 10,000 suppliers each year. We also have one of the coal industry’s largest apprenticeship programs with nearly 200 apprentices and 93 graduates starting their mining careers with Glencore.
According to the International Energy Agency and our analysis, coal will continue to be part of the global energy mix, particularly in the Asian region.
We have a part to play in meeting this energy demand.