Glencore, led by South African executive Gary Nagle, plans to spin off coal business

Timilehin Adejumobi -

Key Point

  • Glencore, led by Gary Nagle, plans to spin off its coal business and list a new entity on the NYSE, shifting its strategic focus.
  • The spinoff reflects a major strategic pivot amid global pressure to reduce fossil fuel reliance, following Teck Resources acquisition. 
  • The company is consulting with shareholders about the potential demerger, with an announcement expected alongside interim results next week.

Glencore Plc, the Swiss multinational commodity trading and mining giant led by South African executive Gary Nagle, is poised to unveil plans for a potential spinoff of its coal business at its upcoming result next week. This decision follows the recent acquisition of Teck Resources’ coal mines earlier this month, marking a pivotal shift in the company’s strategic direction.

Under Nagle, Glencore is considering this strategic pivot amid growing global pressure to reduce reliance on fossil fuels. The coal division has been a cornerstone of Glencore’s profitability. The planned spinoff and the proposed listing of a new entity on the NYSE signify a major departure from the company’s historical stance. 

Glencore’s strategic moves to enhance long-term objectives

Despite mounting pressure, Glencore has defended its coal operations, arguing that retaining control over the mines is more responsible than divestment, given the persistent global demand for coal. Earlier this year, several significant shareholders advocated for keeping the coal assets, highlighting internal disagreements over the future direction.

In a statement released on Tuesday, Glencore disclosed that it is consulting with shareholders about the possible demerger. “We are now in the process of consulting with shareholders to assess their views regarding the potential demerger of our coal and carbon steel materials business,” the company stated. “We expect to announce the outcome of such engagement and the board’s decision regarding the potential demerger alongside our interim results next week.”

Glencore’s evolution and CEO Gary Nagle’s $10 million stake

Founded in the 1970s as a trading company, Glencore has transformed into a dominant force in the global commodities market. With a diverse portfolio encompassing over 60 commodities, Glencore ranks as one of the world’s largest mining groups by revenue. 

In addition to his executive role, Nagle holds a 0.016-percent stake (approximately 2 million shares) in Glencore, valued at more than $10 million. This stake underscores his significant influence beyond the boardroom and his contribution to Glencore’s ongoing success.

Glencore in recent times, Glencore, has been streamlining its portfolio, evidenced by the sale of its controlling stake in Zinc Miner, Volcan Compañia Minera, to Transition Metals AG, a subsidiary of Intera Capital. This $20 million transaction aligns with Glencore’s strategy to concentrate on core assets that support its long-term objectives.