Glencore PLC, a leading diversified natural resource company, has released its half-year production report for 2024.
Key Highlights:
- Copper: 462.6 kt, down 5% from H1 2023.
- Cobalt: 15.9 kt, down 27%.
- Zinc: 417.2 kt, down 4%.
- Lead: 87.9 kt, stable.
- Nickel: 44.2 kt, down 5%.
- Gold: 369 koz, unchanged.
- Silver: 9,117 koz, down 3%.
- Ferrochrome: 599 kt, down 16%.
- Steelmaking coal: 3.4 mt, down 8%.
- Energy coal: 47 mt, down 7%.
Production Analysis
Copper: The drop is primarily due to the sale of the Cobar mine in June 2023. Adjusted for this, copper production was only 2% lower than the same period last year.
Cobalt: Lower production was expected due to reduced run-rates at Mutanda and lower throughput at KCC.
Zinc: The decrease was mainly due to lower output from Antamina, partially offset by the ramp-up at Zhairem.
Nickel: Production was impacted by the transition of Koniambo to care and maintenance, partially offset by improvements at other facilities.
Ferrochrome: Production decreased significantly due to the idling of the Rustenburg smelter in response to weak market conditions.
Coal: The reduction in coal output is attributed to scheduled mine closures and operational challenges in Australia and South Africa.
H2 2024 Outlook
Gary Nagle, CEO of Glencore, highlighted that the company maintains its full-year production guidance and anticipates increased production in H2 2024 across several commodities.
Key Anticipated Increases:
- African Copper: +30 kt due to recovery from H1 outages and higher throughput at Mutanda.
- Antapaccay: +8 kt due to recovery from H1 geotechnical issues.
- Kazzinc: +60 kt from continued ramp-up at Zhairem.
- Murrin Murrin: +3 kt post-annual shutdown in April.
Steelmaking Coal Guidance
Post-acquisition of EVR on 11 July 2024, Glencore has updated its 2024 steelmaking coal production guidance to 19-21 mt, including 12 mt from EVR.
Potential Demerger
Glencore is consulting with shareholders regarding the potential demerger of its coal and carbon steel materials business, with an announcement expected alongside the interim results next week.
Financial and Operational Insights
- Copper, zinc, nickel, and coal: Realised price and cost details are provided in the full report.
- Net working capital: Expected reduction leading to a decline in reported net debt.
- Volcan stake: Sold in May 2024.
- EVR acquisition: Final regulatory approval received, transaction closed on 11 July 2024.
Production Guidance for 2024
| Commodity | FY 2023 Actual | Previous Guidance 2024 | Current Guidance 2024 | H1 2024 Weighting | H2 2024 Weighting |
|---|---|---|---|---|---|
| Copper (kt) | 1,010 | 950-1,010 | 950-1,010 | 47% | 53% |
| Cobalt (kt) | 41.3 | 35-40 | 35-40 | 42% | 58% |
| Zinc (kt) | 919 | 900-950 | 900-950 | 45% | 55% |
| Nickel (kt) | 98 | 80-90 | 80-90(1) | 46%(1) | 54% |
| Ferrochrome (kt) | 1,162 | 1,100-1,200 | 1,100-1,200 | 52% | 48% |
| Steelmaking coal(mt) | 7.5 | 7-9 | 19-21(2) | n.m. | n.m. |
| Energy coal (mt) | 107 | 98-106 | 98-106 | 46% | 54% |