JOHANNESBURG (miningweekly.com) – Climate-friendly energy transition metals, copper, cobalt and nickel, stole the limelight during Glencore’s presentation of 2019 results on Tuesday, when the company revealed that it would be depleting its coal reserves in line with the global move towards a low-carbon economy.

Presenting 26%-lower earnings of $11.6-billion in line with lower commodity prices in 2019, Glencore CEO Ivan Glasenberg said new longer-term scope 1 and 2 emission targets that supported the Paris goals would be released this year.

This follows the company achieving a 10% reduction in scope 1 and 2 emissions in the last four years, doubling its targeted percentage.

The London- and Johannesburg-listed mining and marketing company is projecting a 30% reduction in the far more elaborate scope 3 emissions by 2035.

Scope 1 emissions are from owned or controlled sources. Scope 2 emissions are from purchased energy generation, and scope 3 emissions take in upstream and downstream emissions in the value chain of the reporting company.

By 2035, Glencore aims to reduce coal production by 30%, but without selling its coal assets.

“Natural depletion of our coal resource base in Colombia and to a lesser extent South Africa and Australia, and oil, will contribute to the reduction of our absolute scope 3 emissions over time,” Glasenberg said during the presentation covered by Mining Weekly.

Its strategy is to deplete its coal reserve as it moves into the low-carbon economy through the supply of copper, cobalt and nickel.

LONG-TERM COBALT PARTNERSHIPS

Glasenberg emphasised the major role that his company is playing in the world’s transition to green energy and clean mobility through the supply of cobalt that is essential for the battery electric vehicle (BEV) and mobile phone markets.

Glencore produces 32 000 t of cobalt for a market of about 110 000 t a year and because its cobalt operations in the Democratic Republic of Congo (DRC) will be independently audited each year, it has been able to conclude long-term supply contracts with global battery manufacturers for non-artisanal cobalt.

These contracts are securing offtake of cobalt over the long term for the production of batteries for BEVs.

GLENCORE’S 2020 PRIORITIES

Glencore’s priorities in 2020 begin with the delivery of a step change in safety performance after suffering 17 fatalities in 2019.

Second on the list is the delivery of 270 000 t of copper and 29 000 t of cobalt from the Katanga mine in the DRC, the restarting of the Mopani mine’s copper smelter in Zambia, the commissioning of the new acid plant in Katanga and the establishment of operational stability at the Koniambo nickel project in New Caledonia, the last of its ramp-up assets in the French territory in the South Pacific.

The third priority is to deliver budgeted operational volumes at first quartile costs and margins, to maximise free cash flow generation and to focus on net present value per share.

The fourth priority includes reducing net debt towards the $14-billion to $15-billion range and the last priority is to transition to a new generation of managerial leadership.

Glasenberg wants the new management to be in place as soon as possible.

Questions posed by analysts included queries on whether the company planned to cut coal production in Colombia to stop losses on coal sales.

“If we continue losing cash and we don’t see a turnaround in the coal price, we’re going to make a strong decision,” said Glasenberg.