Diversified miner and commodities trader Glencore has maintained its full-year production guidance for all its resources as it reported production for the first quarter broadly in line with a year ago.
“First quarter copper, zinc and coal production was broadly in line with the prior year comparable period, while nickel increased 14%, reflecting recovery from the Raglan strike impacts in the base period,” CEO Gary Nagle said.
“Lower year-on-year cobalt and ferrochrome volumes primarily reflect the previously announced market-related production adjustments in Democratic Republic of Congo and the decision to idle our Rustenburg ferrochrome smelter in the current price environment,” he said.
Own-sourced copper production of 239,700 tonnes was 2% above the first quarter of 2023 on a like-for-like basis, removing 8,700 tonnes of Cobar (sold in June 2023) volumes from the prior period, the group said in its quarterly update.
Own-sourced cobalt production of 6,600 tonnes was 3,900 tonnes lower than a year ago, mainly reflecting planned lower run- rates at Mutanda in the current weak cobalt pricing environment and mill downtime at KCC.
Own-sourced overall zinc production of 205,600 tonnes was in line with the first quarter of 2023, reflecting the ramp up of Zhairem (14,300 tonnes), offset by lower zinc tonnes from Antamina (10,300 tonnes), on account of its expected mining sequence and zinc Australia (3,500 tonnes), due to a tropical cyclone and flash flooding.
Own-sourced zinc production from the zinc department itself, excluding Antamina, was 10,600 tonnes (6%) higher than a year ago.
Own-sourced nickel production of 23,800 tonnes was 2,900 tonnes (14%) higher than the first quarter of 2023, largely due to recovery from the INO supply chain constraints seen in the base period.
Attributable ferrochrome production of 297,000 tonnes was 103,000 tonnes (26%) below the first quarter of 2023, as the Rustenburg smelter remains idled, pending an improved price-cost environment.
Coal production of 26.6-million tonnes was broadly in line with the first quarter of 2023. SA thermal coal production of 4-million tonnes was in line with a year ago.
Glencore is one of the world’s largest global diversified miners, with more than 150 mining and metallurgical sites and oil production assets, and a footprint in more than 35 countries. It is also one of the world’s largest traders of physical commodities, and that sets it apart from many of its peers, which rely mostly on physical production.
Glencore expects coal production of 105-million to 115-million tonnes for 2024. It said it expected copper production of 950,000 tonnes to 1.01-million tonnes in 2024.
The group, which is listed on the London Stock Exchange with a secondary listing on the JSE, extracts and processes copper ore in South America, DRC and Australia. It is also one of the world’s largest producers of cobalt, a major by-product of copper production.
Cobalt production is expected at 35,000 to 40,000 tonnes, while Zinc output is seen at 900,000 to 950,000 tonnes.
Nickel output is expected at 80,000-90,000 tonnes and ferrochrome at 1.1-million to 1.2-million tonnes.
“Basis Marketing’s performance over the first quarter, we currently expect full-year Marketing Adjusted EBIT in the $3.0-$3.5bn range, being around the top end of our long-term $2.2-3.2bn per annum guidance range, reflecting cyclically elevated interest rates,” Nagle said.
Glencore’s share price fell 1.49% to R109.42 on the day, while the resources index dropped 4.3% as commodity prices fell on a stronger dollar.
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