Vacuum cleaners sanitise by collecting debris. In recent years, Glencore has hoovered up coal assets other mining groups wanted to cleanse themselves of. The Swiss group committed to getting out of coal even as it accumulated cheap assets and banked the cash flows. The strategy has made lots of money for investors.
The latest big acquisition — $6.9bn cash for 77 per cent of the coking coal assets of Teck Resources — starts the clock on a demerger in two years. Talk about eating your cake and still having it.
Most shareholders of Glencore and Teck of Canada want out of filthy coal. Profits from the commodity have waned with the energy crisis triggered by the Ukraine war. The price of power-generating thermal coal, Glencore’s strong suit, has fallen nearly two-thirds in the past year. That adds impetus to get out.