LONDON (Reuters) – Glencore has “a key role to play in enabling the transition to a low-carbon economy,” according to Chief Executive Officer Ivan Glasenberg, writing in the company’s 2018 annual report.
Glencore’s “well-positioned portfolio” includes metals at the heart of the electric vehicle (EV) revolution such as copper, cobalt and nickel. But the global metals and marketing powerhouse has just found out that riding the EV tiger can be perilous as well.
The company reported a 32% drop in first-half core profit on Wednesday thanks in large part to problems at its African copper-cobalt business.
It will place one of its mines, Mutanda in the Democratic Republic of Congo (DRC), on care and maintenance at the end of this year due to “reduced economic viability in the current market environment, most notably cobalt related.” That comes with a $300 million impairment charge in addition to a $350 million cobalt hit on its marketing division.
The battery metal that was supposed to power Glencore’s earnings has rapidly turned into a liability. In part this is down to the multiple problems that come with doing business in the Congo, although operating in one of the world’s most challenging countries is part and parcel of being a major player in the cobalt market.