Glencore plc
Sector: mining
Estimated missed savings vs. renewable-transition baseline · 2022–2026
Glencore plc could have saved $3B.
Here's the receipt.
We modelled what Glencore would have saved if it had undertaken a sustainability transformation before the 2022 and 2026 energy crises. Three transformation paths: (1) renewable PPAs for smelters at $40/MWh would have avoided curtailment when TTF hit $350/MWh, (2) managed coal decline would have avoided the $7B EVR acquisition into a market renewables were already undercutting, and (3) renewable-powered mine sites would have been insulated from the 2026 Hormuz diesel surge. Glencore's $17B coal EBITDA in 2022 masked the structural problem: it profited from the crisis that proved renewables are the hedge. Net figure subtracts coal sustaining capex and hypothetical renewable build-out costs.
View line-by-line breakdown (5 items)
Line items
Renewable PPAs for smelters would have locked in $40/MWh power and avoided curtailment during the 2022 TTF spike to $350/MWh
Saving$1.8BAssumptions:- European smelter energy cost blow-out during 2022 TTF spike
- 1400 USD million
Scope: Line items 1
Glencore's European zinc smelters (Nordenham, Portovesme) and aluminium operations faced power costs exceeding $350/MWh during the TTF spike (15 to 350 EUR/MWh). Curtailment losses plus excess spot procurement costs estimated at $1.4B for the crisis period.
- Renewable PPA counterfactual cost during 2022 crisis
- 40 USD/MWh
Scope: Line items 1
A pre-2020 vintage European corporate renewable PPA would have locked in ~$40/MWh, saving Glencore's smelters from $350/MWh spot exposure and avoiding curtailment entirely.
Medium — Glencore curtailed zinc smelting at Nordenham and Portovesme in 2022 due to power costs exceeding $350/MWh. A pre-2020 renewable PPA at ~$40/MWh would have avoided curtailment losses and excess spot procurement costs.Managed coal decline pre-2024 would have avoided $7B EVR acquisition into a market renewables were already undercutting
Saving$2.4BSources:Assumptions:- Stranded coal asset annual write-down risk
- 2400 USD million/yr
Scope: Line items 2
ACCR estimates Glencore's coal assets face 30-40% stranding risk over the next decade as renewable deployment (up 45% in 2023-24 post-crisis) undercuts thermal coal. Annualised write-down risk on ~$15B coal asset base including $7B EVR.
Low — ACCR analysis notes Glencore's coal assets face accelerated stranding as post-crisis renewable deployment surged 45% globally in 2023-24. The $7B EVR acquisition deepened exposure just as the market turned.Renewable-powered mine sites and smelters would have been insulated from the 2026 Hormuz diesel/power cost surge of 12.5% YoY
Saving$0.9BAssumptions:- Hormuz 2026 mine-site energy cost increase
- 12.5 percent YoY
Scope: Line items 3
Brent spike from $65 to $118/bbl during Feb-Mar 2026 Hormuz disruption drives 12.5% YoY increase in industrial energy costs. Applied to Glencore's ~$7.2B annual energy spend at mines and smelters.
Low — Brent spike from $65 to $118/bbl in Feb-Mar 2026 directly hits mine-site diesel and grid electricity costs. Renewable-powered mines would have been insulated.Coal mine sustaining capex that would be avoided under managed decline
Cost$1.5BSources:Assumptions:- Coal operations sustaining capex
- 1500 USD million/yr
Scope: Line items 4
Estimated annual sustaining capex for Glencore's thermal and steelmaking coal operations (including EVR), based on coal segment's share of $6.7B total net capex.
Medium — Annual sustaining capex for thermal and steelmaking coal operations including EVR, estimated from Glencore's $6.7B total net capex and coal segment share.Renewable site-energy transition capex for smelters and mines
Cost$0.6BSources:Assumptions:- Renewable site-energy transition capex
- 600 USD million/yr
Scope: Line items 5
Estimated cost of building renewable generation capacity for Glencore's smelter and mine operations, based on IEA utility-scale solar+wind benchmarks.
Low
$3B
MediumBleeding
Foolishness score: 72
Show derivation
- Coal windfall dependency during 2022 crisis (record $17B coal EBITDA)Value: 0.9Weight: 0.3Glencore Preliminary Results 2024
- Smelter energy cost surge during 2022 TTF spike (curtailments)Value: 0.8Weight: 0.25Glencore 2024 Sustainability Report
- Stranded coal asset risk as renewables undercut thermal coal post-crisisValue: 0.75Weight: 0.2ACCR Analysis: Glencore's 2024-2026 Climate Action Transition Plan
- Hormuz 2026 exposure: coal logistics and smelter energy costs surgingValue: 0.7Weight: 0.15World Energy Outlook 2024
- Scope 1+2 reduction progress (offset)Value: 0.25Weight: 0.1Glencore 2024 Sustainability Report
Formula: Weighted sum of 2022 coal windfall dependency, smelter energy cost exposure during TTF spike, stranded coal asset risk as renewables undercut coal post-crisis, Hormuz 2026 energy cost resurgence, offset by Scope 1+2 reduction progress. Glencore profited from the 2022 crisis but is now trapped: coal demand is cratering as renewables prove cheaper than crisis-priced fossil fuels.
Weights version: v1.0
Deep dive: assumptions, methodology & revision history
Assumptions
- European smelter energy cost blow-out during 2022 TTF spike
- 1400 USD million
Scope: Line items 1
Glencore's European zinc smelters (Nordenham, Portovesme) and aluminium operations faced power costs exceeding $350/MWh during the TTF spike (15 to 350 EUR/MWh). Curtailment losses plus excess spot procurement costs estimated at $1.4B for the crisis period.
- Renewable PPA counterfactual cost during 2022 crisis
- 40 USD/MWh
Scope: Line items 1
A pre-2020 vintage European corporate renewable PPA would have locked in ~$40/MWh, saving Glencore's smelters from $350/MWh spot exposure and avoiding curtailment entirely.
- Stranded coal asset annual write-down risk
- 2400 USD million/yr
Scope: Line items 2
ACCR estimates Glencore's coal assets face 30-40% stranding risk over the next decade as renewable deployment (up 45% in 2023-24 post-crisis) undercuts thermal coal. Annualised write-down risk on ~$15B coal asset base including $7B EVR.
- Hormuz 2026 mine-site energy cost increase
- 12.5 percent YoY
Scope: Line items 3
Brent spike from $65 to $118/bbl during Feb-Mar 2026 Hormuz disruption drives 12.5% YoY increase in industrial energy costs. Applied to Glencore's ~$7.2B annual energy spend at mines and smelters.
- Coal operations sustaining capex
- 1500 USD million/yr
Scope: Line items 4
Estimated annual sustaining capex for Glencore's thermal and steelmaking coal operations (including EVR), based on coal segment's share of $6.7B total net capex.
- Renewable site-energy transition capex
- 600 USD million/yr
Scope: Line items 5
Estimated cost of building renewable generation capacity for Glencore's smelter and mine operations, based on IEA utility-scale solar+wind benchmarks.
Annual revenue
$230.9B
Glencore Preliminary Results 2024Methodology
We modelled what Glencore would have saved if it had undertaken a sustainability transformation before the 2022 and 2026 energy crises. Three transformation paths: (1) renewable PPAs for smelters at $40/MWh would have avoided curtailment when TTF hit $350/MWh, (2) managed coal decline would have avoided the $7B EVR acquisition into a market renewables were already undercutting, and (3) renewable-powered mine sites would have been insulated from the 2026 Hormuz diesel surge. Glencore's $17B coal EBITDA in 2022 masked the structural problem: it profited from the crisis that proved renewables are the hedge. Net figure subtracts coal sustaining capex and hypothetical renewable build-out costs.
Revision history
1av Full research-backed rewrite with sourced emissions data from Glencore FY2024, ACCR transition plan analysis, and EU ETS shadow pricing.
2av Crisis-focused rewrite: reframed line items around 2022 TTF smelter curtailments, stranded coal assets post-crisis, and 2026 Hormuz energy cost resurgence. Score increased from 68 to 72.
- foolishness_score6872
- net_missed_savings.amount28000000003000000000