Glencore shares slide as coal price hedge backfires

Glencore tripped up in its bid to win back shareholders today due to a whirlwind of big-picture problems, from the strong dollar to tumbling metal prices.

Its shares fell nearly 5% despite the Swiss-based trading powerhouse hitting cost and spending cut targets as it seeks to turn around.

A $400 million charge linked to a coal price hedge gone awry also weighed on the group.

Chief executive Ivan Glasenberg has been trying to win round shareholders fearful it would sink under a huge debt pile and a slowdown in China.

Glencore will cut net debt even further from $18 billion to $17.5 billion, it said today.

Capital expenditure has also been reduced by 50% over the past six months and the group said it was likely to restore a dividend next year.

But the shares lost 9.2p to 180.6p. Glencore is the world’s third-largest copper miner and investors are wary long-running commodity pressures will hurt it after copper prices hit a six-week low yesterday.

A stronger dollar — it reports its earnings in dollars but shares are priced in sterling — and a policy speech from Fed chair Janet Yellen this week which could strengthen the currency is also likely to have taken its toll on the shares.

Overall profits for the six months ending June fell 66% to $300 million.