More on Glencore taking full control of Colombian coal mine
Mining giant Anglo-American has ditched its final thermal coal asset three years earlier than planned as it races to slash its carbon footprint, reports Rachel Millard.
The FTSE 100 company is selling its 33.3pc stake in Columbian mine Cerrejon for $294m [£211m] to rival miner Glencore, which today defended its decision to invest in thermal coal amid heightened concern about climate change.
Anglo-American has just spun-off its South African thermal coal mines into a new listed company, Thungela Resources, which started trading on the London Stock Exchange this month.
Mark Cutifani, chief executive, said: “We have sought to balance the expectations of our wide range of different stakeholders as we have divested our portfolio of thermal coal operations, in each case choosing the exit option most appropriate for the asset and its distinct local and broader circumstances.”
Thermal coal is used to generate power but is carbon-intensive and many countries are trying to use gas or renewable power instead. Anglo-American said in February that it planned to sell its shareholding in Cerrejon by 2024.
The exit will be welcomed by its climate-conscious investors. However, the fact it is being bought by another miner will raise questions about whether there is any overall benefit for global carbon emissions.
Glencore is also buying rival miner BHP’s 33.3pc stake in the mine, meaning it will take full control for a total $588m.
Glencore said the purchase was in line with its plans to cut its own coal portfolio, with the concession due to end in 2034 and production to decline “materially” from 2030.
“The alternative is one or more new partners acquiring these shares and compromising the sustainable operating philosophy of Cerrejón, and extending production beyond the current mining concessions.” it said.