Heat on Glencore over slow burn on coal

Glencore faces a fresh campaign by investors to explain how its coal mining operations align with efforts to cut carbon emissions and curb global warming.

Glencore is one of Australia's largest coal producers and has mines across NSW and Queensland, mostly producing thermal coal that is burnt in power plants to produce electricity.

The first ever shareholder resolution targeting Glencore's thermal coal production has been filed on behalf of a coalition of institutional investors.

Investors from Europe, the United Kingdom and Australia are demanding disclosure of how Glencore's coal production and investment plans align with the Paris Agreement on climate change and the International Energy Agency's push for net zero emissions.

Michael Wyrsch, chief investment officer and deputy CEO at Australia's Vision Super, said it was disappointing Glencore continued to invest in thermal coal, which was a shrinking industry.

"Glencore has a tremendous opportunity to be part of and profit from the energy transition," he said.

"It is well placed with its exposure to many key commodities for the transition including copper and nickel."

He said Glencore's growing recycling business should also see a tailwind from the energy transition away from fossil fuels.

The Australasian Centre for Corporate Responsibility said this was the first time investors had filed a climate resolution specifically focusing on Glencore's thermal coal production and was a significant escalation of pressure on the company.

The shareholder activist organisation, working with UK-based responsible investment group ShareAction, said Glencore was already on notice after nearly one quarter of shareholders rejected its climate plan in 2022.

"The recent decision by Glencore to withdraw an application for the huge new Valeria greenfield coal mine in Australia shows that substantial reductions in coal output are possible," ACCR spokeswoman Naomi Hogan said.

"Glencore is capable of responding to investor concerns and to the global headwinds against new coal."

She said the resolution provides additional momentum for Glencore to align coal production with the Paris goal to limit global temperature increases to 1.5C.

The resolution calls for the Climate Action Transition Plan due in 2024 to fully explain how Glencore is responding to the phase out of coal-fired electricity generation in advanced and developing economies.

Glencore put the $1.5 billion Valeria project under review last month, citing "increased global uncertainty".

The metallurgical and thermal coal development near Emerald in central Queensland had been planned to begin in 2024.

"We will continue to progress various brownfield coal extensions at existing mines in Australia," Glencore said at the time.

"But note that within the next four years our Liddell, Newlands and Integra mines will close and undergo appropriate rehabilitation."