Glencore announced on June 28 that it has reached an agreement with its joint venture partners BHP and Anglo American to buy both of their 33.3 per cent shares in the Cerrejón thermal coal mine in La Guajira, Colombia, becoming sole owner of the mine. The company said it expects to pay US$230 million for the combined two-thirds of the asset.

The move comes as many companies and governments have started to shift away from thermal coal in order to better align themselves with climate targets. Glencore gave several reasons for the decision to take sole ownership, founded in what it sees as environmental upsides of the buyout.

First, Glencore said the alternatives to taking full ownership were less favourable from an environmental perspective, since this would mean “one or more new JV partners acquiring these shares, compromising the sustainable operating philosophy of Cerrejón and extending production beyond the current mining concessions.”

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Giving up its stake in the company would also, according to Glencore, mean compromising its commitment to a “managed decline” of its coal portfolio, and would not result in “a genuine reduction of absolute greenhouse gas emissions.” The managed decline, instead, will see the mine through the expiration of the company’s mining concessions by 2034.

Consequently, Glencore sees the buyout as the right decision with regard to its climate targets, and the net-zero goals of the Paris Agreement. Glencore CEO Ivan Glasenberg said, “Glencore has been involved with Cerrejón for more than 20 years. We know the asset well and believe that we are the most responsible steward for Cerrejón at this stage of its life cycle. [...] We are confident we can manage the decline of our fossil fuel portfolio in a responsible manner that is also consistent with meeting the goals of the Paris Agreement, as demonstrated by our strengthened total emission reduction targets.”

The company also announced that it had reviewed its fossil fuel production profile and released a new short-term emissions reduction target of 15 per cent by 2026, and a medium-term target of 50 per cent (up from 40) by 2035.