Glencore : UN World Cities Day 2020

The annual event, established by the United Nations, focuses world attention on urbanisation as a central issue, encouraging international cooperation in addressing the urban challenges of sustainable development.

With the purpose of responsibly sourcing the commodities that advance everyday life, Glencore is playing a key role in helping address some of the biggest challenges presented by the world's increasing urbanisation, by producing and marketing the commodities needed for renewable energy generation and storage, and for the growth in electric vehicles.

Challenges of a rapidly growing urban population

Globally, there are now more than 800 cities with over one million inhabitants, and every three months another city surpasses five million residents.

According to the UN, 55% of the total global population lives in urban areas, and this is forecast to increase to 68% by 2050. Together, India, China and Nigeria will account for over a third of that growth.

While such statistics are generally positive in terms of economic development - in 2015, 85% of global GDP was generated in cities - such rapid urbanisation poses huge challenges, in particular for infrastructure and the environment. Cities consume three-quarters of the world's natural resources and account for 80% of global greenhouse gas emissions.

Our commodities underpin energy and mobility transformation

At Glencore, we recognise that we have a key role to play in enabling the transition to a low-carbon economy, and this is reflected in our portfolio of commodities such as copper, cobalt and nickel which underpin energy and mobility transformation. Earlier this year we announced that we are aligning our capital expenditure with the production of such commodities.

With air pollution in cities a major global health problem, and regulation increasingly forcing diesel engines out of city centres, electric vehicle (EV) development is integral to the strategies of every major automotive manufacturer. Sales have grown correspondingly fast in recent years.

That growth in EV uptake is driving demand for the mass production of powerful batteries that require raw materials including nickel and cobalt, presenting Glencore with the opportunity to play a part in reducing air pollution in cities and other urbanised areas.

The increased deployment of EVs will result in greater demand for secure and reliable baseload electricity and associated infrastructure, also supporting demand for the commodities we produce and market.

Similarly, in energy transformation, we are supporting the growth in cities of renewable energy in the form of wind and solar, both of which technologies require significant amounts of copper and aluminium for construction.

With cities a major contributor to greenhouse gas emissions, we are also researching the potential of technologies such as carbon capture, utilisation and storage (CCUS) which promise to reduce greenhouse gas emissions from fossil fuel use. Carbon capture is the process by which carbon dioxide (CO2), emitted by large industrial processes and electricity generating plants, is captured and stored underground.

In Australia, we are currently progressing a CCUS project in Queensland's Surat Basin, close to the city of Brisbane. This will provide a technology pathway for materially reducing Australia's overall carbon footprint, help federal and state governments achieve their stated emissions reductions targets, and provide a pathway for many of our international end-use customers to reduce their CO2 emissions.

Valuing our communities and cities

The sub-theme for this World Cities Day 2020 - a year largely defined by the pandemic - is 'Valuing our communities and cities', an appropriate topic for 12 months in which city life has changed dramatically, and communities have united in response to the virus.

At Glencore, we recognise the importance of our own communities. We build and maintain long-standing relationships with them, dealing openly, transparently and inclusively. In a year such as this, those community relationships are perhaps more important than ever.

When we start to recover from the disruption, and cities return to a kind of normal, our commodities will continue to be a part of advancing everyday life, playing a role in providing cleaner energy and transport, to the communities of cities from Brisbane to Johannesburg.