Glencore’s ferrochrome production dipped in the first quarter ended March 2024 as the Swiss multinational commodity trading group continued to idle its South African smelter, while its thermal coal production also remained largely flat.
The diversified resources firm produces ferrochrome from South Africa as well as the Democratic Republic of Congo (DRC), but has been adjusting its production profile in the DRC.
In the quarter to March, Glencore’s attributable ferrochrome production amounted to 297 000 tons, dipping by 26% or some 103 000 tons below output for the same period a year ago.
This as the Glencore Rustenburg smelter “remains idled, pending an improved price/cost” environment.
Glencore CEO Gary Nagle explained how the quarterly production had been impacted by idling Rustenburg operations and adjustments in DRC.
“Lower year-on-year cobalt and ferrochrome volumes primarily reflect the previously announced market-related production adjustments in the DRC and the decision to idle our Rustenburg ferrochrome smelter in the current price environment,” Nagle said.
In terms of thermal coal, Glencore’s production of the energy commodity touched 4 million, in line with previous contrasting period thresholds.
Furthermore, its overall production, including that from Australia, amounted to 26.6m tons, also “broadly in line” with last year’s same period production.
Production of its steel-making coal of about 1.4m tons was, however, 30% weaker in the 2024 first quarter to March.
Glencore said this was because the same period in 2023 included 0.3m tons from Newlands mine, which was shut down in February last year, while the remaining variance mainly related to a long-wall move at the Oaky Creek operation.
In terms of copper, Glencore’s output strengthened by 2% to 239 700 tons.
Its own sourced cobalt production of 6 600 tons was 3 900 tons lower than the corresponding period last year, mainly reflecting planned lower run rates at Mutanda in the current weak cobalt pricing environment and mill downtime.
The resources firm had nearly flat zinc production at around 205 600 tons, reflecting the ramp up of Zhairem, but offset by lower zinc tons from Antamina, as a result of its expected mining sequence and zinc Australia, which was affected by a tropical cyclone and flash flooding.
Glencore’s own sourced zinc production, excluding Antamina, was, however, higher by about 10 600 tons, or 6%, compared to the same March quarter in 2023.
Nickel production for Glencore for the quarter under review grew 14% to 23 800 tons due to recovery from the INO supply chain constraints experienced in the year earlier same period.
Glencore is, nonetheless, maintaining its full-year guidance.
“Our full year production guidance remains unchanged from that presented at the beginning of the year,” Nagle said.
In March, Glencore confirmed the completion of the disposal of Mopani mine in Zambia.
The company has previously said it would continue to retain off take rights in respect of output from Mopani.
It said “total proceeds received by Glencore, including the settlement of working capital facilities were $411 million (R7.7 billion) in cash” on closing.
There was also a deferred consideration of $135m, which will be settled over a time frame spanning four-and-a-half years with interest, and a royalty of 10% of the copper price above $12 000 per ton from 2027 until 2035.
BUSINESS REPORT