TIDMGLEN
RNS Number : 7167G
Glencore PLC
21 July 2023
NEWS RELEASE
Baar, 21 July 2023
Half-Year Production Report 2023
Glencore Chief Executive Officer, Gary Nagle:
"We are pleased to report a solid first-half production
performance from our underlying base business, where our key
copper, coal and zinc assets performed in line with expectations
and previously communicated guidance.
"Our full year production guidance remains unchanged from
earlier guidance. Second half volume weightings in copper, zinc and
nickel reflect higher expected production volumes from Collahuasi,
Kazzinc, Mount Isa and INO.
"In our Marketing segment, progressively through 2023, the
particularly elevated commodity market imbalances and volatility
levels that prevailed through much of 2022, have largely
normalised, which, while clearly impacting profitability, has
allowed for the release of some of the investment made in non-RMI
marketing working capital in 2022. We continue to expect a full
year 2023 Adjusted EBIT outcome above the top end of our $2.2-3.2
billion p.a. long-term guidance range, likely in the $3.5-4.0
billion range."
Production from own sources - Total(1)
Change
H1 2023 H1 2022 %
------------ ------------ ----------- ----------- -----------
Copper kt 488.0 510.2 (4)
Cobalt kt 21.7 20.7 5
Zinc kt 434.7 480.7 (10)
Lead kt 87.4 95.1 (8)
Nickel kt 46.4 57.8 (20)
Gold koz 369 334 10
Silver koz 9,446 12,579 (25)
Ferrochrome kt 717 786 (9)
Coal mt 54.2 55.4 (2)
1. Controlled industrial assets and joint ventures only
(excludes Volcan). Production is on a 100% basis, except as stated
later in this report.
H1 production highlights
-- Own sourced copper production of 488,000 tonnes was 22,200
tonnes (4%) lower than H1 2022, consistent with our expectations
around mining sequences at Collahuasi and Antamina, and lower
copper by-products outside the Copper department. Own source copper
sales volumes were some 11,000 tonnes lower due to timing of
shipments.
-- Own sourced cobalt production of 21,700 tonnes was 1,000
tonnes (5%) higher than H1 2022, reflecting improved recoveries at
Katanga.
-- Own sourced zinc production of 434,700 tonnes was 46,000
tonnes (10%) lower than H1 2022, mainly reflecting the 2022
disposals of South American zinc operations (18,700 tonnes) and the
closure of Matagami (17,300 tonnes).
-- Own sourced nickel production of 46,400 tonnes was 11,400
tonnes (20%) lower than H1 2022, primarily reflecting higher INO
third party production (versus own sourced), in large part
necessitated by the strike at Raglan mine in 2022.
-- Attributable ferrochrome production of 717,000 tonnes was
69,000 tonnes (9%) below H1 2022 due to planned additional smelter
offline days.
-- Coal production of 54.2 million tonnes was broadly in line with H1 2022.
-- Full year production guidance remains unchanged from that
presented in Glencore's Q1 2023 Production Report and December 2022
investor update.
H1 realised prices
Realised
--------------------
c/lb $/t
------- ----------- -------
Copper 375 8,267
Zinc 124 2,729
Nickel 953 21,010
Cobalt: Given recent overall sector cobalt hydroxide oversupply,
hydroxide payabilities (on already materially lower cobalt metal
prices, down c.25% at 30 June 2023 from 31 December 2022) declined
to a historic low of close to 50% in May 2023 before recovering to
mid-60% by the end of H1. The significantly lower period over
period realised cobalt hydroxide prices, have therefore materially
impacted earnings from our African copper operations, via
significantly higher post by-product $/lb average unit costs
Coal: The average Newcastle coal (NEWC) settlement price for H1
2023 was $204.3/t. After applying a portfolio mix adjustment
(component of our regular coal cash flow modelling guidance) of
$43.6/t to reflect e.g. movements in the pricing of non-NEWC
quality coals, coking coal margins and effect of JPU fixed-price
contracts, an average thermal-equivalent realised price of c.
$160.7/t can be applied across all coal sales volumes.
Production guidance
Actual Previous
FY guidance Current guidance 2023 weighting
2022 2023 2023 H1 H2
------------ ------- -------- ------------ ---------------- --- ------- -------
Copper kt 1,058 1,040 +/- 30 1,040 +/- 30 47% 53%
------------ ---------- -------- ------------ ---------------- --- ------- -------
Cobalt kt 43.8 38 +/- 5 38 +/- 5 57% 43%
------------ ---------- -------- ------------ ---------------- --- ------- -------
Zinc kt 939 950 +/- 30 950 +/- 30 (1) 46% 54%
------------ ---------- -------- ------------ ---------------- --- ------- -------
Nickel kt 108 112 +/- 5 112 +/- 5 41% 59%
------------ ---------- -------- ------------ ---------------- --- ------- -------
Ferrochrome kt 1,488 1,310 +/- 30 1,310 +/- 30 55% 45%
------------ ---------- -------- ------------ ---------------- --- ------- -------
Coal mt 110 110 +/- 5 110 +/- 5 49% 51%
1 Excludes Volcan
Production guidance is unchanged from that presented in
Glencore's Q1 2023 Production Report and December 2022 investor
update.
Key H1/H2 variations reflect:
-- Copper: 552kt H2 2023 guidance midpoint, up 64kt (13%) from
H1 2023 actual production - mainly higher grades and throughput at
Collahuasi as the mine reaches higher grade material, which,
together with additional H2 volumes from Antapaccay and Lomas
Bayas, offset the impact of no Cobar tonnage in H2, following its
disposal in June 2023
-- Cobalt: 16kt, 6kt lower (27%) - reflects the weak current market conditions
-- Zinc: 515kt, up 80kt (18%) - Zhairem's continued ramp-up and
reduced weather challenges in Australia, also aiding copper
production
-- Nickel: 65kt, up 19kt (41%) - circa 10kt from INO as the
impact of last year's Raglan strike is fully recovered; remaining
9kt from stronger Murrin and Koniambo contributions, basis H1 2023
maintenance and more recent production performances
-- Ferrochrome: 593kt, 124kt lower (17%) - winter season offline
days/maintenance in South Africa
Other highlights
-- On 13 June, Glencore and its partner shareholders in Viterra
Limited announced an agreement with Bunge Limited, whereby Bunge
and Viterra would merge in a cash and stock transaction. Under the
terms of the agreement, Glencore will receive $1.0 billion cash and
approximately $3.1 billion in Bunge stock (at date of announcement)
for its circa 50% stake in Viterra. The merger, subject to
satisfaction of customary closing conditions, including receipt of
regulatory approvals and approval by Bunge shareholders, is
expected to close in mid-2024.
-- On 16 June, Glencore sold its 100% share in Cobar Management
Pty Ltd (CMPL) to Metals Acquisition Corp (MAC), with Glencore
continuing to offtake the copper concentrate produced at CMPL. As
part of the consideration, Glencore now holds 20.6% of the shares
in MAC, which is accounted for under the equity method.
-- On 27 April, Glencore announced that it had agreed to acquire
a 30% equity stake in Alunorte and a 45% equity stake in MRN from
Hydro, with completion expected to occur in H2 2023.
To view the full report please click:
https://www.glencore.com/.rest/api/v1/documents/static/26ae0436-7810-403e-b3b2-e069d77d1b36/GLEN_2023-H1_ProductionReport.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
Glencore LEI : 2138002658CPO9NBH955
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