October 7, 2015 / 9:20 AM / 4 years ago

Glencore calls on Paris climate summit to adopt coal policy

SYDNEY, Oct 7 (Reuters) - Embattled miner and commodities trader Glencore Plc on Wednesday called on delegates meeting for a global climate summit later this year to adopt a policy that recognises coal as an important energy source.

“We need global policy that acknowledges the global energy reality that fossil fuels including coal will continue to be used,” Glencore head of global coal assets Peter Freyberg said in prepared remarks for a speech in Australia.

“We also need a policy which addresses the funding gap to facilitate the build of high-efficiency, low emission power stations,” Freyberg said.

Close to 200 nations are set to meet at a United Nations summit from Nov. 30-Dec. 11 in Paris in hopes of forging a pact to slow man-made climate change by weaning countries off fossil fuels.

As one of the world’s biggest suppliers of coal worldwide, managing the production of some 98 million tonnes in Australia alone last year, Glencore has been hit hard by a dramatic weakening of the sector.

Though not specific to coal the Swiss-based group has pledged to cut its $30 billion of net debt by selling assets, spending less, suspending dividend payments and raising $2.5 billion in a share sale.

Freyberg noted that prices for coking and thermal coal have fallen by nearly 75 percent and 60 percent respectively since 2011.

“In February, Glencore cut its 2015 Australian coal exports by 15 million tonnes to address global oversupply and continues to review its operations,” he said.

While the coal sector was still “rebalancing” due to weaker-than-predicted demand in China, growth in new coal-fired power stations in Taiwan, India, Vietnam and elsewhere in Asia pointed to higher usage in the future, according to Freyberg, citing International Energy Agency forecasts that global energy demand will rise by 37 percent over the next quarter-century.

“Fossil fuels, including coal, will continue to dominate the global energy mix,” he said.

Glencore, whose shares have been hammered by worries about its debt burden, on Monday sought to assure investors that the impact of any credit rating downgrade on its debt profile would be modest. (Reporting by James Regan)

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