Glencore completed its takeover of the steelmaking coal unit of Teck Resources in July following a protracted battle over the business with the Canadian company.

The Swiss commodities trading and mining group had considered merging the newly acquired business, Elk Valley Resources, with its own coal activities and spinning it off.

But Glencore said that after consulting its shareholders, most expressed a preference for retaining the coal and carbon steel materials business.

"I certainly am convinced that it's the right decision," Glencore CEO Gary Nagle said in a telephone conference.

The company has argued it needs the cash flow from its coal mines to invest in raw materials useful for the green transition, such as copper and cobalt.

"Following extensive consultation with our shareholders, whose views were very clear, and our own analysis, the Board believes retention offers the lowest risk pathway to create value for Glencore shareholders today," chairman Kalidas Madhavpeddi said.

"The expected cash generative capacity of the coal and carbon steel materials business significantly enhances the quality of our portfolio," Madhavpeddi added in a statement.

The company said shareholders preferred to keep the coal business "primarily on the basis that retention should enhance Glencore's cash generating capacity to fund opportunities in our transition metals portfolio" such as copper.

They also concluded that it would "accelerate and optimise the return of excess cash flows to shareholders".

"There's no question that keeping it in Glencore's hands is positive from an ESG (Environment, Social and Governance) perspective and from a value perspective," Nagle said.

The firm's CEO deemed that "to keep these assets in Glencore's hands rather than spinning out because of our responsible run down strategy" was "the way to go" -- claiming that even some "left-leaning NGOs" pushed it to retain its coal activities.

But the company's strategy to hold on to the highly-polluting resource has been criticised by environmental charities and shareholders, who pointed out that coal is banned from some investment portfolios.

Glencore since 2020 has been barred from Norway's sovereign wealth fund, the world's largest.

- 'Managed decline' -

Oil, gas and coal companies are under pressure to transition away from fossil fuels, the biggest contributor to climate change.

While Glencore's Australian rival Rio Tinto and British group Anglo American are exiting coal, the Swiss company has a "managed decline" strategy to ensure a "responsible" phase out its coal operations.

Glencore said Wednesday that while it has decided to keep coal, its board "preserves the option to consider a demerger of all or part of this business in the future if circumstances change".

Coal generates key revenue for the group, whose profits boomed in 2022 when prices for the combustible soared following Russia's invasion of Ukraine.

Separately, Glencore posted a $233-million loss for the first half of the year, after earning $4.6 billion over the same period last year, as commodity prices fell, "particularly thermal coal".

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Glencore

TECK RESOURCES