Barclays’ analysts back Glencore coal strategy
JOHANNESBURG (miningweekly.com) – Glencore’s coal strategy favours a Paris-compliant coal runoff, which increases investability, say Barclays equity research analysts in a note.
Analysts Ian Rossouw, Amos Fletcher and Tom Zang see little value to unlock in the current coal market environment and question whether a coal business of Glencore’s scale could be successfully demerged.
Their analysis follows hedge fund Bluebell Capital Partners asking the diversified London- and Johannesburg-listed mining and marketing company to separate its thermal coal business on the grounds that it had become a ‘barrier to investment” by being “morally unacceptable and financially flawed”.
Bluebell argued that Glencore could realise more value for shareholders if it separated its coal business, simplified its asset base, disposed of noncore asset Viterra, and tackled governance issues.
On Glencore’s current strategy increasing investability, the Barclays analysts contend that Glencore is already addressing many of the concerns raised and remains a Barclays top pick because of its catalyst-rich investment case.
“While the coal spinoff argument is not new, Glencore’s strategy has clearly outlined that the favoured route is to reduce coal exposure via depletion in a Paris-compliant pathway (50% reduction by 2035) and growing its future-facing commodities.
“We believe this is one of the catalysts for Glencore becoming more investible, given investors with over $60-trillion assets under management (AUM) are prepared to invest in companies undertaking responsible transition (Climate Action 100+) versus $39-trillion AUM with absolute coal exclusion policies (Disinvestment),” the analysts stated in a note to Mining Weekly.
They also noted that 94% of Glencore’s shareholders voted in favour of the company’s climate action transition plan at its annual general meeting in April.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation