Glencore has become the latest energy heavyweight to succumb to climate change pressure and has announced it will stop raising its coal production capacity, CNBC reports.
The Swiss company’s current thermal coal production capacity is 150 million tonnes annually, which makes it the biggest single exporter of the commodity. But as pressure mounts on the energy and manufacturing industries to put more effort into tackling climate change by reducing harmful emissions, companies are beginning to transform.
Glencore, for example, plans to use the capital that will be freed thanks to the capacity cap to increase its production of basic metals such as copper, cobalt, nickel, vanadium, and zinc, all of them used in EV batteries and other technology that enables the shift to cleaner energy generation.
The move is also aimed at avoiding shareholder concerns as this group of stakeholders, too, become increasingly environmentally conscious.
“To deliver a strong investment case to our shareholders, we must invest in assets that will be resilient to regulatory, physical and operational risks related to climate change,” Glencore said in a statement. “As one of the world’s largest diversified resource companies, Glencore has a key role to play in enabling transition to a low carbon economy,” it also said.
The decision could not have been an easy one to make: last year, profits from coal amount to $5.2 billion, versus $4.7 billion from copper, Bloomberg reported, citing Glencore’s latest financial figures. This was the first time coal profits exceeded copper profits as demand for the fossil fuel used widely for power generation in emerging markets continued to be strong.
Meanwhile, Australia has said it needs to capture as much of the ‘booming’ coal market as possible, a day after major producer Glencore said it would curtail further coal output expansions to limit climate change.
Glencore, which produces around one-fifth of Australia’s coal, said that it would limit its total coal capacity to current levels of around 145 million tonnes to support a global transition into a low carbon economy and limit increasing the risks from climate change.