Activist investor Bluebell Capital Partners is pressing Glencore (LON: GLEN) to spin off聽its thermal coal business to move from being a颅 鈥渄isliked stock鈥� to a top pick for investors supporting support sustainability and environmental stewardship.聽
The plan by London-based hedge fund, of the United Nations supported Principles for Responsible Investment (PRI), would see Glencore creating a separate coal company with A and B shares and a dowry to fund mine rehabilitation.聽
In a letter dated January 24, Bluebell partners Giuseppe Bivona and Marco Taricco聽said the Swiss miner and commodity trader鈥檚 significant exposure to coal makes it a less attractive partner. Coal, they wrote, is effectively a 鈥榩oison pill鈥� in an industry where further consolidation is both needed and expected.
The proposed new structure would allow Glencore to keep full governance control, cuts its coal exposure to a minimum and reduce the discount its shares are trading at when compared to peers who have exited coal, Bluebell said.聽
Investors and the biggest mining companies have been grappling for years over who should own the world鈥檚 coal mines and some of Glencore鈥檚 rivals have already gotten out of the business because of pressure from shareholders. But more recently there has been a growing pushback from some climate activists and investors who are worried that the assets would actually produce more coal for longer under new owners.
Emissions in the equation
The world鈥檚 top miner, BHP (ASX: BHP), has also announced聽plans to exit thermal coal聽as part of its聽commitment to reduce emissions.
Rio Tinto (ASX, LON, NYSE: RIO), the world鈥檚 second-largest mining company,聽sold its last coal mine in 2018.
Anglo American has consistently been聽offloading coal operations since 2014. Last year, it聽spun out its South African thermal coal operations聽and sold its stake in聽a Colombian mine to Glencore聽after shareholder calls to ditch the polluting fossil fuel to meet emissions targets.
Unlike its peers, Anglo decided to hold on to its metallurgical coal assets, a key commodity in the making of steel.
Bluebell鈥檚 latest push move follows a previous letter, sent to Glencore in November, in which it asked recently appointed chair Kalidas Madhavpeddi and chief executive Gary Nagle to simplify the company鈥檚 asset base and tackle governance issues. 聽
Nagle, who stepped into the top job in June 2021,聽reacted by defending the company鈥檚 sprawling coal business and added he would continue running down the mines over the next 30 years, as originally planned.聽
Despite managing only about $275 million of assets, Bluebell has gained a reputation as a waves-maker that triggered the ousting of Danone chief Emmanuel Faber last year and is now locked in a bitter dispute with Belgian chemicals company Solvay.
Glencore, the world鈥檚 biggest thermal-coal shipper, is expected聽to report bumper profits on Tuesday, partly fuelled by record coal prices.
(With files from Bloomberg and Reuters)