Aug 7, 2024 - Business

Glencore reverses course on coal unit spinout

Dan Primack,
Alan Neuhauser

Illustration of a tug of war rope looped around a piece of coal with hands pulling on either end. — Illustration: Gabriella Turrisi/Axios

Glencore, the Swiss commodities giant, announced that it no longer plans to spin off its coal business.

Why it matters: This reflects how some institutional investors are cooling on ESG, and how coal economics are being boosted by soaring U.S. energy demands.

Plus coal for steelmaking and the fact that coal plants don't require the pipeline infrastructure that natural gas does.

Catch up quick: Glencore just last month completed its $7 billion purchase of a majority stake in the coal unit of Canada's Teck Resources.

When the deal was announced last November, Glencore said the plan was to spin out its entire coal business via a NYSE listing within two years — largely due to investor pressure.

The bottom line: The energy transition will be bumpy.

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Glencore reverses course on coal unit spinout

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