Glencore has announced plans to return $4billion to shareholders following an ‘extraordinary year’, which was buoyed by booming commodity prices.
The Anglo-Swiss mining giant said it would purchase $550million of its own shares and administer $3.4billion in dividends thanks to its net debt plunging by over 60 per cent to $6billion last year.
It also achieved record annual underlying earnings and revenue of over $200billion on the back of commodities that it mines, such as coal, oil and copper, soaring in value as the world economy reopened in 2021.
Records: Glencore achieved its highest-ever annual underlying earnings ever on the back of commodities that it mines, soaring in value as the world economy reopened in 2021
However, the company revealed that it was setting aside $1.5billion in potential costs and fines arising from investigations into suspected fraud and bribery across multiple countries, which it expects to be finalised this year.
Since 2018, the US Department of Justice has been formally examining whether the business breached money-laundering rules and bribed government officials in its dealings with Venezuela, Nigeria and the Democratic Republic of Congo.
That year also saw Brazilian authorities launch a probe into the firm as part of Operation Car Wash, the largest corruption inquiry in Brazil’s history that concerns suspected illicit payments made to employees of Petrobras.
In the following year, the UK’s Serious Fraud Office and the US commodities market regulator began separate corruption investigations into Glencore.
The company, one of the world’s largest commodity traders, said it ‘has been cooperating extensively with the various authorities in order to resolve these investigations as expeditiously as possible’.
Glencore has also faced increasing pressure to reduce its reliance on coal for environmental reasons, notably from London-based hedge fund Bluebell Capital Partners.
Environmental goals: Glencore plans to run down coal production over the next three decades, all the while reducing its emissions by half by 2035 and becoming net-zero by 2050
The Financial Times reported yesterday that it had seen a letter from the investment giant stating that it wants the firm to demerge its coal division and adopt a dual-share structure.
Glencore plans to run down coal production over the next three decades, all the while reducing its emissions by half by 2035 and becoming net-zero by 2050.
Chief executive Gary Nagle said: ‘Looking forward, we remain focused on our strategy to enable and deliver decarbonisation and meet the increasing demand for everyday metals, while responsibly meeting the energy needs of today.
‘We look to the future confident that we have the right pathway to succeed in a net zero economy and create sustainable long-term value for all stakeholders, while operating in a responsible manner across all aspects of our business.’
Shares in the group rose 2.4 per cent in early trading to 432.2p, meaning their value has now grown by 57 per cent over the last 12 months.
