Glencore Profit Slides as Copper Rally Offset by Coal Slump
(Bloomberg) — Glencore Plc posted a drop in full-year profit as record copper prices failed to offset declining earnings from the commodity trader-cum-miner’s sprawling coal operations.
The company reported core earnings of $13.5 billion, 6% lower than the previous year. Still, Glencore said it was returning $2 billion to shareholders, including a top up distribution of $800 million.
The results come less than two weeks after talks between Rio Tinto Group and Glencore failed, ending for now a deal that would have created the world’s biggest miner. The negotiations collapsed after the two sides could not find common ground on how big a premium Rio should pay.
Rio had wanted to buy Glencore to expand its exposure to copper, a metal that traded at record highs last month. Buying Glencore would have roughly doubled Rio’s output of the metal and added more future growth.
The attraction of copper has become obvious in the past year, with prices surging about 35%. Mining bosses have long warned that future supplies will be tight as demand is forecast to grow amid a dearth of new mines.
Still, Glencore’s copper business has faced sharp scrutiny from investors in recent years as production slumped and the company consistently missed or lowered production targets, especially as prices for key its moneymaker coal slid.
Glencore Chief Executive Officer Gary Nagle has sought to reset its copper business, where production has fallen about 40% since 2018. Late last year, the company unveiled plans to almost double output over the next decade and has said it’s confident that 2026 will be its production nadir, before a recovery from 2027 onward.
The company on Wednesday said it reached an agreement with the Democratic Republic of Congo’s state mining company over a land package that will allow it to boost copper production in the country.
The divided fortunes between metals and coal was also reflected in Glencore’s trading profits.
Its giant commodity trading business also reported a drop in earnings to $2.9 billion. Despite a strong year from its metal traders, who cashed in on President Donald Trump’s threat of tariffs, energy and coal trading profits fell 32%.
The company’s net debt was little changed at $11.2 billion. Despite this being above the company’s target — which would normally prevent additional payments — Glencore said it was paying a top up dividend as it expects to monetize its stake in agriculture trader Bunge Global SA at some stage.
(Updates with details throughout)
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