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LONDON - Glencore on Tuesday left its 2024 production guidance unchanged for most metals and lifted coal to reflect the acquisition of Teck's steelmaking coal unit, saying it will announce whether it will separate its coal assets at its half-year financial results next week.
The miner and trader this month completed a deal to buy the majority of Teck's coal business.
"We are now in the process of consulting with shareholders to assess their views regarding the potential demerger of our coal and carbon steel materials business," CEO Gary Nagle said in a release.
"We expect to be able to announce the outcome of such engagement and the decision of the Board ...next week."
Glencore is already a top producer of thermal coal, the most polluting fossil fuel, with an expected output of between 98 million and 106 million tons this year.
Its 2024 steelmaking coal production should increase to 19-21 million tons post-acquisition, from 7-9 million.
Reuters in March reported that a growing group of Glencore investors were keen for it to keep mining coal instead of spinning out the soon-to-be enlarged unit, with one eye on its financial outlook and another on the environmental benefits of keeping coal in-house.
While a demerger could lead to a share price bump, critics say that spun-off assets are often shifted into private ownership and run for longer with less rigorous investor oversight, potentially leading to a worse climate outcome.
Glencore said it will responsibly run down its thermal coal assets.
"A coal demerger is highly unlikely, and ...the acquisition of EVR from Teck will prove to be a significant positive for Glencore as this is the world's highest quality met coal business by a fairly wide margin," said Chris LaFemina, analyst at Jefferies.
Glencore reported lower numbers for its first half copper, nickel, zinc, coal and cobalt production, compared to the same year-ago period.
It left its overall 2024 guidance for copper, a metal key for energy transition applications, unchanged at between 950,000 and 1.01 million tons, having produced 462,600 tons in the six months to June.
(Reporting by Clara Denina; editing by Jason Neely and Miral Fahmy)