Key Points
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Investors increasingly question copper strategy at Glencore amid uncertainty.
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Missed Teck acquisition heightens investor concerns over Glencore’s pipeline.
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Copper bonanza leaves mining rivals better positioned for global transition.
Shareholders are putting more and more pressure on Glencore Plc, saying that the Swiss commodity giant hasn’t fully taken advantage of the global copper boom. Copper prices are still high because there is a lot of demand for electric vehicles, renewable energy projects, and better power grids. However, Glencore’s production and strategy have made investors wonder if it is falling behind its competitors.
The Baar-based miner made just under 1 million metric tonnes of copper in 2023, which is 5% less than the year before. The drop was due in part to problems with operations at its Katanga Mining operations in the Democratic Republic of Congo and the Antapaccay mine in Peru. On the other hand, companies like BHP Group, Rio Tinto Plc, and Freeport-McMoRan Inc. have been aggressively increasing their copper production to become leaders in the metal that is most important for the energy transition.
Investors are unsure about Glencore’s copper strategy
According to a report by Mining weekly, Ben Davis, an analyst at Liberum Capital in London, said, “Glencore knows how to trade, but the copper story isn’t very interesting.” “Investors want to know if management really wants to compete with BHP and Rio on a large scale.”
Earlier this year, the company tried to buy Teck Resources Ltd., a Canadian miner with valuable copper assets, but Teck turned it down. Since the deal fell through, people have been paying more attention to Chief Executive Gary Nagle’s growth strategy. Some shareholders say that Glencore needs to do more than just make opportunistic takeovers.
Rivals grow thanks to the copper boom
BHP’s $6.4 billion purchase of OZ Minerals and Rio Tinto’s expansion of its Oyu Tolgoi project in Mongolia show how much the copper industry wants to grow. Freeport-McMoRan, the biggest publicly traded copper producer, has also done well because its Grasberg mine in Indonesia is producing a lot of copper.
Glencore, on the other hand, has relied heavily on coal, which made up more than 40% of its $34 billion EBITDA in 2023. That dependence has made money, but investors want the company to shift more towards metals that help the world become less carbon-intensive.
Glencore weighs the future while investors watch
CEO Nagle has defended the group’s varied model, saying that its integrated trading and mining platform is a unique strength. He says that Glencore is still in a good position to supply important transition metals like copper, cobalt, and nickel.
Activist investors still want clearer direction. Daniel Major, an analyst at UBS, said, “Glencore can’t afford to drift because demand is expected to outpace supply by 2030.” “It has to act quickly on copper or it will lose investors’ trust.”
For now, Glencore’s missed opportunities and weaker copper profile leave shareholders impatient, even as the miner weighs how to balance coal cash flows with its energy transition ambitions.
