LONDON (Reuters) – Miner and trader Glencore on Friday cut its full-year copper guidance, partly due to reduced output from its Katanga mine in the Democratic Republic of Congo (DRC), but pointed to a strong financial performance on high coal and oil prices. Total copper production fell by 15% to 510,200 tonnes in the first […]
LONDON (Reuters) – Miner and trader Glencore on Friday cut its full-year copper guidance, partly due to reduced output from its Katanga mine in the Democratic Republic of Congo (DRC), but pointed to a strong financial performance on high coal and oil prices.
Total copper production fell by 15% to 510,200 tonnes in the first half of this year, but battery material cobalt output increased 40% to 20,700 tonnes. Cobalt is mainly produced as a by-product of copper in the DRC.
Geotechnical problems at the Katanga open-pit mine led the London-listed miner to guide towards output of 1.06 million tonnes for the year, down from 1.11 million tonnes previously.
Copper is widely used in infrastructure projects but also wiring in electric vehicles and their charging stations.
“Our financial performance (both industrial and marketing) was very strong during the period, particularly on account of buoyant energy markets,” chief executive Gary Nagle said, adding that net working capital has also significantly increased.
First-half financial results are set for Aug. 4.
“The underlying result will be very strong and when markets return to lower volatility this working capital will be released making it a temporary impact,” RBC Capital Markets analyst Tyler Broda said.
After an initial dip, shares were flat in London, in line with the wider index.
Unlike its mining rivals, which bowed to investor pressure to exit fossil fuels, Glencore mines thermal coal, whose prices have reached record highs, reflecting shortages during protracted COVID-related lockdowns and the war in Ukraine, and trades millions of barrels of crude oil a year.
The company in June forecast its trading division’s half-year adjusted operating profit would exceed $3.2 billion, the top end of its long-term annual outlook range.
Coal production rose 14% to 55.4 million tonnes in the first half on higher output from its Cerrejón mine in Colombia.
Glencore, however, flagged the impact of recent flooding in Australia could result in a lower coal production number for the year.
(Reporting by Clara Denina; Editing by David Goodman and Mark Potter)
