A multinational resources company has replaced its global leader during heightened trade tensions with an Asian super power.
Ivan Glasenberg has resigned from both his chief executive and board member roles at Glencore. After spending the past 18 years in the top job, he will finish up sometime during the first half of 2021.
No termination pay
The mining giant revealed Glasenberg will not receive any termination pay, and have to settle for his pro-rata base salary of US$1.4 million (A$1.9M) plus superannuation payments of up to US$52,000 (A$69,968).
“No severance payment or payment in lieu of notice will be made,” the company said.
“Since the company’s initial public offering in 2011, Mr Glasenberg has waived all entitlement to variable remuneration. He will receive his base salary and pension contributions to the date of his retirement.”
Poor quality dispute
The shock decision came just days after China’s Foreign Ministry accused all Australian mining companies of selling poorly refined coal that releases more carbon dioxide into the atmosphere.
“China Customs has found many cases where the imported coal did not meet our environmental protection standards while conducting risk monitoring and analysis over the safety and quality of imported coal,” Chinese Foreign Ministry spokesman Zhao Lijian said in a public statement.
“In accordance with relevant laws and regulations, customs officials have strengthened quality, safety and environmental inspections of imported coal to better protect the legitimate rights and interests of Chinese companies and ensure environmental safety.”
The latest coking coal export data from the Commonwealth Bank of Australia shows Australian coal exports to China have dropped 47 per cent in October 2020 compared to the previous corresponding month a year ago.
Coal exports to China also fell 27 per cent in the same month compared to September 2020 due to the ruling Chinese Communist Party’s decision to delay shipments from arriving at Chinese ports.
COVID and power prices blamed
Glencore previously reported the worldwide pandemic and soaring electricity and gas prices had significantly affected demand for Australian coal.
The proponent implemented temporary site and equipment shutdowns at several coal mines, and reevaluated its Townsville Copper Refinery and Mount Isa Copper Smelter. If management took no action, rising operating expenses could have forced operations to close as early as 2022. Such a shutdown would impact on up to 3440 employees who work across all copper operations according to Glencore’s latest corporate profile report.
“The COVID-19 pandemic continues to impact the global market environment, including demand for Australian coal exports,” a Glencore spokesperson said in a public statement.
“In response, Glencore is introducing measures to manage our coal production profile … where temporary shutdowns are necessary … workers will be required to take leave during this time.”
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Incoming CEO Gary Nagle will relocate from Australia to Switzerland early in the New Year, and begin the handover process with his predecessor.
“Gary Nagle has held senior roles in coal and ferroalloys in Colombia, South Africa and Australia,” Glencore chairman Tony Hayward said in a public statement.
“He has been on the board’s radar for more than several years and was selected following a succession process overseen by the board. We are confident that he has the right skill set and qualities to lead the Glencore of tomorrow.”
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