Coal remains king for Glencore as shareholders resist pressure from activists Business

Bluebell’s letter is just the latest move from an activist investor seeking to influence how natural resource behemoths embark on a transition to green energy. In recent months, oil and gas giants Royal Dutch Shell and ExxonMobil have both been the target of militant campaigns.

In Shell’s case, the Wall Street Third Point raider demanded a dismantling of the oil and gas giant, saying the FTSE 100 company should put its oil and refining operations into a separate business focused on returning money to the shareholders. However, major investors supported Shell’s transition plans.

As Glencore embarked on an internal reshuffle, Glasenberg’s remaining influence means it will be difficult for Bluebell to make any changes. The South African businessman owns a 9.2% stake, while several other former executives also have large stakes. In June, he was replaced as CEO after nearly two decades by Gary Nagle, while a new chairman was also appointed.

In addition to the asset split, Bluebell wants to see improvements in the company’s corporate governance – Glencore has faced a number of forensic inquiries, including an ongoing investigation by the US Department of Justice on allegations of bribery and corruption.

The letter said, “We recognize that a company in your industry will always be embroiled in controversies, however, the sheer amount is clear testimony that the existing governance framework fails to ensure proper oversight and stewardship of the operations of the business. business. ”

But other investors fear such drastic actions could make Glencore unrecognizable and a target for takeover. The 25 largest shareholder said the miner could not part with his coal business “without destroying value”.

Meanwhile, Liberum’s Davis said if Glencore got rid of its coal assets, it would likely be bought by someone else, adding that “such a move would remove barriers for BHP and Rio Tinto.”

The letter was likely leaked to coincide with Glencore’s annual Investor Day which takes place on Thursday, giving Nagle its first opportunity to present its strategic plans for the company.

The South African has previously said he would potentially be open to splitting the company’s coal assets if this becomes a problem for major investors and has also started the process of divesting non-core assets.

But the timing is true for Bluebell, according to the 25th largest shareholder. “Bluebell is more of a publicist than an activist,” he jibes.