7 months ago • 2 mins
What’s going on here?
Swiss commodities giant Glencore released a swaggering update on Friday, but that hasn’t stopped it from fantasizing about what could be.
What does this mean?
Glencore and its peers boasted champagne-worthy results in 2022, after war-induced shortages led to wild price swings that buoyed up profit for commodities firms. And while some of Glencore’s rivals have been busy managing expectations for 2023, the Swiss goliath is being anything but humble. The firm’s trading business is on track for another bumper year, pushed along by a strong quarter of energy trading. And even though its mining segment dealt with a few roadblocks at the mines, Glencore’s sticking to its full-year production targets across all of its divisions.
Why should I care?
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Glencore unveiled this update before the scheduled release date, which might be part of a brewing masterplan. See, it recently offered to buy Canadian mining rival Teck Resources for $23 billion, planning to spin off anything that coal touches and rebrand the remainder as “GlenTeck”. That would have helped Glencore become less reliant on coal and stock up on green-energy-fueling metals like copper and zinc, a sure bet to please eco-conscious investors. But Teck rejected the offer, and Glencore’s been trying to pull the firm to the negotiating table ever since. Time’s running out, though: Teck’s due to vote on its own spinoff plans this week.
The bigger picture: Deal or no deal.
Even if the deal’s dead, this is a sign of what’s to come in the industry. The world’s biggest commodity companies have been steadily preparing for life after fossil fuels, stopping or winding down their dirtier operations and expanding into decarbonizing materials like copper, nickel, and lithium. And while you can bet they’re on the hunt for fresh sites, snapping up rivals is the quickest way to make headway.
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