Diversified miner Glencore's coal production from own sources fell 23% on the year in the first quarter at 24.5 million mt, as the company progressed with its strategy to pull out of the coal business.
Production varied according to the coal type. The company reported a 33% year-on-year rise in coking coal output -- used in steelmaking -- at 2.4 million mt, while semi-soft coking coal output dropped 25% at 1.2 million mt.
Output of thermal coal, typically used in power generation, fell 27% from a year earlier at 20.9 million mt, Glencore said in a Q1 production report.
The fall of 7.5 million mt from the same period a year ago reflected the care and maintenance status that continued at the miner's Prodeco asset in Colombia, where production has now ceased, and market-related production cuts in Australia, actioned in second-half 2020, Glencore said. Severe wet weather in Australia in March temporarily disrupted production, it said.
Prodeco has commenced the process of handing its mining contracts back to the state, Glencore said. The mines will remain on care and maintenance until the formal process of relinquishing the contracts is complete.
At Cerrejon in Colombia, attributable production of 1.8 million mt was 200,000 mt, 10%, lower than Q1 2020, reflecting staff absences due to COVID-19 related self isolation or quarantine, and the restart and ramp-up of operations following resolution of a strike in late 2020.
The company maintained full-year coal production guidance at 113 million mt, slightly higher than 2020 output of 106 million mt. Production had fallen from 140 million mt in 2019.
Relevant coal-grade prices averaged 26% higher in Q1 than in Q1 2020, according to the Glencore report.
Coal portfolio, emissions reduction
In a March report, Glencore said its planned reduction in carbon emissions will be underpinned by the managed reduction of its coal portfolio.
The company is targeting a 40% reduction in total emissions by 2035 on 2019 levels and its ambition, with a supportive policy environment, is to be a net-zero total emissions company by 2050.
"We expect our coal portfolio to produce no more than 85 million mt by 2035, down 40% from 2019 levels. By 2050, our only remaining coal mines, if any, will likely be in Australia, with any post-2050 production, including for metallurgical purposes, assumed to be neutralised directly through carbon capture, utilisation and storage, or indirectly through offsets," the company said in the report.
Glencore added that the most significant contributor to its Scope 3 emissions is its customers' usage of the fossil fuels it produces, predominantly coal.
"Recent years have seen significant declines in use of coal for power generation in Europe, largely displaced by natural gas and LNG. In the Asia-Pacific region, the key destination for our Australian and South African coal production, coal is the predominant source of fuel for power generation and, we believe, will remain a vital transition fuel until such time as alternative infrastructure can be approved, financed and constructed," it said.
