British mining company Anglo American has taken small steps to move away from coal as investors ratchet up pressure, but these movements have been minimal compared to other mining majors divesting from coal.
In an update for its investors on 10 December 2019, the company lowered its 2020 metallurgical coal production outlook from 22-24 metric tonnes (Mt) to 21-23 Mt. Anglo American has also reduced its 2021 thermal coal target from as much as 30Mt to 26Mt.
This follows an investor visit to Anglo American assets in Australia in November 2019, in which thermal coal was conspicuously absent from a list of units the company considered to have long-term potential. A spokesperson for the company said Anglo American is on a trajectory away from thermal coal, adding that this move would be done “responsibly.”
However, in July 2019, Anglo American approved the development of the Aquila coal project in Queensland, which will extend the life of the existing underground operations by six years.
Glencore is Australia’s biggest coal miner, and although it has been slow to divest from coal compared to other mining multinationals (even purchasing coal assets from these companies), it appears that pressure from investors has encouraged the company to start moving from coal.
In February 2019, Glencore outlined plans to improve its environmental record, including efforts to ensure its membership in trade organisations does not undermine support for the Paris Agreement, and disclosing to investors how its operations in exploration and acquisition of fossils fuels are aligned with Paris Agreement targets.
While this is not as extensive as the moves away from coal from companies such as BHP and Rio Tinto, Glencore’s position as a producer of around 25% of the global coal trade, with about a third of its business constituted by coal, means this cap on production could have significant effects on the coal industry as a whole.
In a statement describing these commitments, Glencore said: “To meet the growing needs of a lower carbon economy, Glencore aims to prioritise its capital investment to grow production of commodities essential to the energy and mobility transition and to limit its coal production capacity broadly to current levels.”
However, in August 2019 the New South Wales Independent Planning Commission approved a A$381m coal mine, to be developed as a joint venture between Glencore and US coal producer Peabody. The development will facilitate the extraction of an additional 150million Mt of run-of-mine coal over a 23-year period, with the caveat that the coal can only be sold to signatories of the Paris Agreement.