Jesse Riseborough London
GLENCORE, the mining and commodities company led by billionaire Ivan Glasenberg, said a planned curtailment of coal production would accelerate this year after first-quarter output increased 4 percent.
Glencore, the world’s biggest exporter of power station coal, produced 35.6 million tons of the fuel in the quarter compared with 34.1 million tons a year earlier, the company said yesterday. Output in the preceding quarter was 34.9 million tons.
The addition of two new projects in South Africa combined with bad weather and mine closures in the year-earlier period helped boost production in the quarter, it said.
Glencore said in February it would trim Australian output, which was little changed at 15.8 million tons in the quarter, by 15 million tons this year after prices slumped to near the lowest since 2007. Cuts in South Africa, where it was considering shutting operations, “are expected to impact later in 2015”, the company said.
Global coal producers have curbed production of the fuel as a worldwide glut puts pressure on prices. Benchmark thermal coal prices are down by more than half since peaking in January 2011.
Glencore is cutting total spending this year to a range of $6.5 billion (R78.27bn) and $6.8bn.
Copper output from the company’s mines in Africa, Australia and South America fell 9 percent to 350 700 tons from a year earlier. Ore grades declined at the Alumbrera mine in Argentina and the Antamina mine in Peru, while planned work at the Collahuasi operation in Chile also reduced volumes of the metal.
“Glencore’s output data today reinforce our view that mined copper output will disappoint in 2015 relative to the market’s expectations,” Nic Brown, the head of commodity research at Natixis in London, said yesterday.
The results were “quite disappointing overall with performance in both base metals and coal behind our initial expectations,” Paul Gait, an analyst at Sanford C Bernstein in London, wrote in a report.
Glencore shares on the JSE ended down 1.1 percent at R57.22.
The company has a market value of R748bn.
Production of zinc increased 16 percent to 356 200 tons, lead decreased 4 percent to 75 800 tons and nickel gained 7 percent to 23 800 tons. – Bloomberg