Diversified miner Glencore has narrowed its full-year coal production guidance, reflecting concern about the outlook for seaborn thermal coal prices.
The price of coal has slumped by nearly a quarter since the start of the year as trade wars, policy uncertainty and investment in renewable energy weigh on demand.
Despite the pressure on demand, global coal supply remains robust, with top producer China vowing to boost its output by 1.5% to 4.82-billion tonnes this year after delivering record output in 2024.
Amid an uncertain price outlook, Glencore announced a 5-million tonne to 10-million tonne production cut at its Columbian Cerrejon mine last month, resulting in a 5% reduction in its full-year guidance.
The Switzerland-based miner now expects to produce between 87-million tonnes and 95-million tonnes of coal this year, down from 92-million tonnes to 100-million tonnes previously.
“Since quarter-end, financial markets, including commodities, have been highly volatile and unpredictable, responding rapidly to US tariff news flow and uncertainty,” Glencore CEO Gary Nagle said.
“In such an unpredictable environment, risk management has been a primary focus, noting the many complex supply chains we are exposed to, including the US, China, Europe and Canada,” he said.
Last year, thermal coal prices fell markedly as global energy markets continued to normalise from the supply disruptions caused by geopolitical conflict in 2022 and 2023.
Declining prices, together with export logistics challenges, saw Glencore impairing its SA coal operations by $611m (R11bn), resulting in a net loss of nearly R30bn for the year to end-December.
In a trading statement on Wednesday, Glencore reported energy coal production down 7% year on year in the first quarter, citing the planned closure of two Australian coal mines last year.
Aside from energy coal, the group maintained full-year guidance for all its other commodities, despite a slump in copper, nickel and ferrochrome volumes.
Copper production was down 30% in the three months to end-March, which is expected to be the weakest quarter this year, according to Nagle.
“While copper had a slow start to the year, quarter one is expected to be the lowest quarter, and a significantly stronger performance is anticipated over the remainder of 2025,” he said.
The acquisition of Elk Valley Resources and a strong performance by Glencore’s Australian operations also boosted steelmaking coal volumes to 8.3-million tonnes, while cobalt and zinc output were up 44% and 4%, respectively.
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