London - Glencore Xstrata’s quarterly copper output surged by 34 percent as African mines added to volumes, the company said yesterday.
The Swiss-based company said production from its own mines was 412 900 tons in the third quarter, up from 307 900 tons a year earlier. Copper output including feeds from third-party sources was 695 600 tons.
Glencore completed the $29 billion (R287bn) takeover of Xstrata in May to create the fourth-largest mining company, valued at $73bn. Copper and coal sales are the biggest contributors to profit. Coal volumes rose 9 percent while African output of copper was boosted by the Mutanda, Katanga and Mopani mines.
The performance in both commodities was “particularly outstanding”, Morgan Stanley analyst Menno Sanderse wrote. Credit Suisse said production was on average 2 percent to 3 percent higher than estimated.
Profitability at the group’s trading arm “continued to be broadly in line with expectations”, Glencore Xstrata said. “Metals and energy remain the strongest, however, we are also witnessing an improvement in agricultural performance.”
The biggest exporter of power station coal has interests in more than 35 coal mines in Colombia, Africa and Australia, making up about 10 percent of global seaborne supply. It teamed up with Sumitomo last week to buy a $1bn controlling stake in Australia’s third-largest thermal coal mine.
Total coal output rose to 36.8 million tons. Zinc production fell 12 percent to 332 200 tons, lead gained 5 percent to 80 700 tons and nickel slid 6 percent to 22 500 tons.
Glencore estimates cost savings of $2bn in 2014 from the Xstrata deal as it shuts 33 offices, fires workers and cuts operational costs. – Bloomberg