Glencore is to pay $2bn (£1.47bn) to shareholders after a tumultuous year in which talks over a blockbuster $260bn merger with fellow mining company Rio Tinto collapsed and profits plummeted.
The FTSE 100 company announced the payout on Wednesday despite reporting a 6% fall in annual profits to $13.5bn on the previous year.
It comes weeks after the biggest deal in mining history collapsed, with the Swiss-headquartered commodities company pushing ahead with plans to double its copper output over the next decade.
In the second half of the year, higher metals prices and an increase in copper production were not enough to compensate for the decline in coal and fuel commodity prices, which reduced earnings. Founded in 1974 as a trading company, Glencore operates in more than 30 countries and has a workforce of approximately 140,000 people.
The idea of combining Rio and Glencore has been floated repeatedly over the past two decades and was first mooted in 2008 before the global financial crisis. Rio rejected Glencore’s merger approach in 2014, but another round of talks in 2024 also came to nothing.
The most recent efforts follow a $53bn deal between Anglo American and Canadian rival Tech last September, which brought together the world’s two biggest copper producers.
Despite the deal’s failure, Glencore’s chief executive, Gary Nagle, pointed out that the past year had brought “significant progress” and “clear momentum for our copper-led growth strategy”.
Copper has become central to Glencore’s future, with demand for the metal growing as the world builds electric vehicles, renewable energy infrastructure and power grids. The company aims to produce more than 1m tonnes of copper per year by the end of 2028, rising to 1.6m tonnes by 2035, making it one of the world’s largest producers.
Glencore is the world’s sixth-largest copper producer and the largest listed coal producer. Nagle defended the payout to investors by pointing to Glencore’s $4bn stake in Bunge, the US agricultural trader, received when Bunge merged with Glencore’s Viterra grain business last year, which he described as surplus capital earmarked for shareholders.
Glencore has long been one of the world’s biggest coal traders, a business that has drawn criticism from climate campaigners but which the company argues is necessary to keep the lights on in developing economies.
In 2024, it scrapped plans to exit the coal business after shareholders urged the commodities company to keep its highly profitable but heavily polluting division.
