Glencore Year-to-Date Performance Hurt by War, Weather, Strikes -- Commodity Comment
October 28 2022 - 4:03AM
Dow Jones News
Glencore PLC on Friday reported falls in year-to-date production
for half of its commodities, blaming the extreme weather in
Australia, industrial action at nickel assets in Canada and Norway,
and supply-chain issues in Kazakhstan stemming from the
Russia-Ukraine war. Here is what the commodity mining and trading
company had to say:
On production:
"Own sourced copper production of 770,500 metric tons was
125,000 tons (14%) lower than the comparable 2021 period, due to
the previously reported land access, geotechnical and processing
constraints at Katanga (50,600 tons), the basis change arising from
the sale of Ernest Henry in January 2022 (34,100 tons), Collahuasi
lower ore mined due to mine sequencing (23,000 tons) and lower
copper units produced within Glencore's zinc business."
"Own sourced zinc production of 699,600 tons was 156,200 tons
(18%) lower than the comparable 2021 period, reflecting progressive
reduction in the South American portfolio through disposals and
closures (70,700 tons), closure of Matagami (20,100 tons) and
Covid-19 related absenteeism leading to lower development rates and
sequence changes at Mount Isa (51,200 tons)."
"Own sourced nickel production of 81,600 tons was 10,500 tons
(15%) higher than the comparable 2021 period, reflecting Koniambo
operating both production lines in 2022 and stable Murrin Murrin
operations, compared to a multi-week shutdown for scheduled
maintenance in the base period, partially offset by lower
production at INO due to strikes at Raglan and Nikkelverk."
"Coal production of 81.9 million tons was 5.6 million tons (7%)
higher than the comparable 2021 period, mainly reflecting higher
attributable production from Cerrejon, following the acquisition in
January 2022 of the remaining two-thirds interest that Glencore did
not already own."
On guidance:
"Zinc down 65,000 metric tons (6%) - emerging supply-chain
issues in Kazakhstan as the secondary impacts of the Russia/Ukraine
war are felt throughout the CIS region."
"Nickel down 8,000 tons (7%) - effects of the approximately
15-week strike at Raglan mine and the 10-day strike at
Nikkelverk."
"Coal down 11 million (9%) - severe flooding in NSW (also higher
than average rainfall in Queensland) and associated delays in
restoring mine production and logistics infrastructure (primary NSW
export rail line closed for about two weeks). The La Nina weather
pattern exhibits a high probability of causing further disruption
in 4Q, with a wide plus/minus 4mt range reflecting this."
On other matters:
"Following the exceptionally strong marketing performance in the
first half of the year, we currently expect a significantly
reduced, but still above-average second-half contribution, likely
exceeding $1.6 billion, being the top end of the pro-rated
long-term Ebit guidance range of $2.2 [billion] to $3.2 billion
p.a."
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
October 28, 2022 03:48 ET (07:48 GMT)
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