Glencore Is Cashing In on Coal to Dodge Big Mining’s Slowdown – by Thomas Biesheuvel (Bloomberg News – August 2, 2022)

(Bloomberg) — The world’s biggest miners have spent the past two weeks reporting lower profits, shrinking dividends and a worsening outlook as the year rolls on. Next up: Glencore Plc looks set to buck the trend.

While commodities like iron ore and copper have retreated as gloom settles over the global economy, Glencore is enjoying two key advantages over its mining rivals — a powerful trading business that thrives in volatile markets, and a suite of coal mines now churning out previously unimaginable earnings thanks to the global energy crunch.

As a result, analysts are forecasting record profits and returns when Glencore reports on Thursday, with first-half earnings seen more than doubling from a year ago. It’s a sharp reversal from previous years.

The company had lagged its biggest rivals, largely because it doesn’t mine any iron ore, a commodity that helped supercharge earnings for mega miners BHP Group and Rio Tinto Group. But China’s Covid controls have sapped demand for the steelmaking ingredient as investor worries about a global recession weigh on commodity prices more broadly.

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