(Bloomberg Opinion) — Thermal coal has become a byword for the resource industry’s climate crimes. From BlackRock Inc. down, fund managers are reluctant to touch a mineral that releases more carbon dioxide than any other energy source. Large miners, from BHP Group to Anglo American Plc, are trying to dump it. Coal is also — for now at least — profitable.
It’s the unpalatable truth that explains why Glencore Plc, the world’s largest exporter of the black stuff, sticks with a dying fuel. Morals aside, the details suggest Chief Executive Officer Ivan Glasenberg and his team may well be right.
Tuesday’s full-year earnings from the trader and miner bore more than a few smudges. Lower prices for commodities like copper and cobalt took a heavy toll. Coal didn’t help, with the price of benchmark Newcastle coal down by over a third in 2019.
Colombia, where Glencore’s reserves will run out in the next decade or so, accounted for nearly $1 billion of a $2.8 billion impairment that dragged the company to its first net loss since 2015. Those mines supply an Atlantic market where demand has all but dried up, thanks to mild weather, high European carbon prices and cheap gas.
But that doesn’t mean the end is nigh. Coal is obviously not the energy source of the future. That much is apparent even to those who agree with the International Energy Agency’s “stated policy” scenario, which sees global coal demand roughly flat out to 2040.
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