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Glencore will buy BHP's and Anglo American's stakes in Colombian coal mine

The global mining group Glencore has reached an agreement with its partners BHP and Anglo American to acquire their respective 33.3% interests in the Cerrejon thermal coal mine in Colombia, for an aggregate purchase consideration of around US$588m (subject to price adjustments calculated at closing, currently estimated at US$230m). The transaction, which is subject to various regulatory approvals, is expected to be completed in the first half of 2022 but will have an economic effective date of 31 December 2020.

Cerrejon is the largest coal mine in Colombia, representing 31% of the country's total coal production (26 Mt in 2019). In 2020, its coal production halved to 12.4 Mt, due to the pandemic that reduced activity over a 40-day period and to a 90-day strike. Its production is expected to decline by 2030 and the current mining concessions should expire by 2034. Glencore has committed to a responsible managed decline of its coal portfolio, rather than divesting it, and doesn't expect owning 100% of Cerrejon to compromise its climate commitments (becoming a net-zero emission company by 2050).