Glencore to buy out BHP, Anglo in Colombian coal mine

LONDON (Reuters) -Diversified miner Glencore has agreed to buy out the stakes in Colombia’s thermal coal mine Cerrejon held by its partners BHP and Anglo American.

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company’s headquarters in Baar, Switzerland, September 30, 2015. REUTERS/Arnd Wiegmann/File Photo

Glencore, which said it expects to pay $230 million for the stakes when the deal completes in the first half of 2022, sees production volumes at the mine declining materially by 2030.

Mining companies have been reviewing their ownership of thermal coal assets as they transition out of the most polluting fossil fuels amid growing climate concerns and a shift towards sustainable investing.

Glencore, which plans to become a net-zero emission company by 2050, has set a goal of managing the depletion of its coal mines by the mid-2040s, rather than selling them, and said owning 100% of Cerrejon would not compromise its climate commitments.

“The disposal of Glencore’s current stake in the mine would not be consistent with our stated commitment to a responsible managed decline of our coal portfolio, nor would it result in a genuine reduction of absolute greenhouse gas emissions,” it said in a statement on Monday.

Glencore wants to increase its medium-term absolute total emissions reduction target to 50% from 40% by 2035 compared to 2019 levels and said it will introduce a new short-term reduction target of 15% by 2026.

The world’s largest listed miner BHP Group is also looking to offload its coal assets in Australia, while Anglo spun off its coal portfolio in South Africa earlier this month.

Cerrejon is an integrated mining and transportation complex in Colombia’s La Guajira province, in the northeastern part of the country, which includes an open-pit mine, a 150-km (93-mile) railway line and a Caribbean port.

Its current mining concessions are due to expire in 2034.

Glencore’s share price was down 0.7% by 0719 GMT, in line with the rest of the mining sector.

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