Glencore will return more than $7bn (£5.8bn) to shareholders in dividends and buybacks after the commodities giant reported another blockbuster profit driven by its coal and trading divisions.

While the miner and its rivals have been positioning themselves to take advantage of rising demand for metals linked to the energy transition — such as copper for wiring and nickel for batteries — the commodity giant’s profits last year were overwhelmingly driven by mining and trading fossil fuels. 

Glencore’s core profit rose 60pc to a record $34.1bn (£28.2bn), of which more than half — $17.9bn (£14.8bn) — came from coal production. The commodity trading unit earned $6.4bn (£5.3bn) in core profit, also its highest ever.

Glencore has been one of the biggest beneficiaries from the chaos in commodity markets caused by Russia’s invasion of Ukraine. 

The company’s decision to keep mining coal while rivals exited has paid off massively, as the dirtiest fuel surged to a record last year, while its sprawling trading business has benefited from sharp price swings and dislocations in energy markets across the world. Chief executive Gary Nagle said: 

The unprecedented developments in global energy markets were material drivers for both our marketing and industrial businesses. 

Demand for many of our commodities is likely to remain healthy, while supply constraints persist and inventories remain relatively low.