The Swiss-based group, whose market capitalisation makes it one of the largest FTSE 100 companies, will distribute more than $7bn in dividends and buybacks to shareholders after the commodities giant reported another period of record revenues and profits from its coal and trading divisions.

Glencore has been one of the biggest beneficiaries of the volatility in commodity markets caused by the Russian invasion of Ukraine. The company's decision to continue mining coal while its competitors stopped mining has paid off as the price of the dirtiest fossil fuel rose to record levels last year (Chart 1). Its trading division has also benefited from sharp price swings and fluctuations in energy markets around the world, with core profits up 73%. However, Glencore has expressed caution about the economic outlook for next year, mainly due to high levels of inflation around the world and the subsequent interest rate hikes that central banks are trying to counter rising prices.

Glencore is the first of the large diversified miners to post earnings for 2022. While other producers also post large earnings, Glencore is differentiated by its large coal production. The company has typically lagged its peers in recent years because it produces no iron ore - the main source of profits for other big miners BHP Group and Rio Tinto Group.