Glencore posts record $48b profit as ‘King Coal’ is back

Glencore has posted a record-breaking $US34 billion ($49 billion) profit after sales of “King Coal” soared in the energy crisis.

More than half of the mining giant’s earnings, or about $US18 billion, came from coal production in 2022, as Russia’s invasion of Ukraine drove demand for the highly polluting fuel.

The booming sales are a coup for Glencore, which has continued to mine coal even as it has become controversial and rivals decided to exit the field.

As it touted the results this week, the company said it would return $US7.1billion to shareholders, through $US5.6 billion in dividends and a $US1.5 billion stock buyback.

Gary Nagle, Glencore’s chief executive, said the global pandemic, the subsequent reopening and the Ukraine war had all “exposed vulnerabilities in energy security and supply chains”, sparking volatility in markets that helped the group to huge profits.

He said: “High inflation rates and associated tighter monetary conditions present some risk to the economic outlook in 2023.” But he added: “Demand for many of our commodities is likely to remain healthy.”

Glencore has emerged as a major winner from the chaos in the commodity markets that followed on from the decision by Russia’s President Vladimir Putin to invade Ukraine last February. As flows of Russian gas to Europe have dried up, a global scramble for other supplies has ensued, while many countries – including Germany and China – have returned to burning larger quantities of coal than they would wish to help keep the lights on over winter.

That sent coal demand to an all time high in 2022, with prices following suit.

Partly as a result of this, Glencore said its sales surged by 26 per cent last year to $US256 billion, while profits jumped 60 per cent to $US34 billion.