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Billionaire Glasenberg’s Last Deal Says Coal Isn’t Dead Yet

  • Coal use is rising in many regions despite energy transition
  • Prices reach 13-year high as demand recovers from pandemic
Ivan Glasenberg, billionaire and chief executive officer of Glencore Plc
Ivan Glasenberg, billionaire and chief executive officer of Glencore Plc
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Ivan Glasenberg is Mr. Coal. The most successful commodity trader of his generation built his career on slaking the world’s thirst for cheap energy with countless shiploads of the fossil fuel, a trade that made him both the boss and biggest shareholder at Glencore Plc.

Now, Glasenberg is on his way out, stepping down this week after almost two decades as chief executive officer of the resources giant. As the world navigates the transition to a low-carbon energy system, many expect coal to head the same way, replaced by huge investments in solar and wind power.

But in his last days on the job, Glasenberg made one last coal deal, spending $588 million buying out the partners in the Cerrejon mine in Colombia. His parting act shows why expectations of coal’s swift demise are likely to be confounded and how mining the black stuff could remain vastly profitable for years to come.

For the world leaders working on strengthening pro-climate policies at this year’s COP26 summit in Glasgow, it highlights an awkward truth: the coal industry is booming. Prices are at a thirteen-year high as recovery from the pandemic revives power use around the world. China, which burns half the world’s coal, has been forced to try and cool the market. In the U.S., where coal has been on the retreat over the last decade, consumption is expected to rebound 16% this year. Even in Europe, coal use is inching up as demand stretches electricity grids.

The question, both for investors tracking the progress of the energy transition and the health of the planet, is how long it lasts.

Even Glencore doesn’t think coal will be around for ever –- under pressure from fund managers they have set targets to reduce consumption and promised to close their mines within the next 30 years. The number of planned coal-fired power plants around the world is falling as banks refuse to finance their construction and renewable projects can more than hold their own cost-wise.

But Glasenberg, and his successor, Gary Nagle, clearly believe it will be long, lucrative twilight.