Glencore PLC said on Wednesday its shareholders have raised questions about how the company intends to integrate Teck Resources Ltd’s steelmaking coal business into its green plan.
The Barr, Switzerland-based miner and commodity trader announced last month it had entered a binding agreement to buy 77% of Teck’s steelmaking coal business, Elk Valley Resources, for $6.93 billion in cash.
The diversified mining group said on Wednesday it continued to engage its shareholders over its climate policy since it ran into dissent at its annual general meeting in May.
During the AGM back then, 30% of shareholder votes rejected Glencore’s 2022 climate report, while 29% were cast in favour of a shareholder resolution in respect of the group’s next climate action transition plan.
As the votes against Glencore’s recommendations surpassed a 20% threshold, Glencore was obliged to consult shareholders over their concerns.
Glencore said it had continued dialogue through ‘extensive engagement’ with investors after the vote on a range of climate-related matters back in May.
It said one of the principal areas of interest for its shareholders include the integration of Elk Valley Resources steel-making coal assets into the climate strategy.
Glencore has raise the ire of investors before over its climate plan.
At an AGM in April 2022, 24% of shareholders voted against the 2021 sustainability report.
Glencore had contended in this report ‘responsible stewardship’ of coal assets was the ‘correct’ way to meet its green ambitions, while its rivals exited gas-emitting businesses. Anglo American PLC in 2021 got rid of its South African coal assets by spinning them off into a separately listed Thungela Resources Ltd.
Glencore expects the Teck acquisition to close in the third quarter of next year.
In response to shareholder recommendations, Glencore said on Wednesday that it will maintain its commitment to reducing total industrial emissions, report on progress against this target, update its assessment regarding its portfolio’s resilience, and address the climate-related aspects of its proposed acquisition of Elk Valley Resources.
Glencore maintains its desire towards ‘achieving a net zero total industrial emissions footprint by 2050’, though adds that this is contingent upon ‘a supportive policy environment’.
Shares in Glencore dropped 0.4% to 434.35 pence on Wednesday afternoon in London, but they were up 0.3% at R 103.89 in Johannesburg.
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