TIDMGLEN
RNS Number : 0398H
Glencore PLC
30 July 2021
NEWS RELEASE
Baar, 30 July 2021
Half-Year Production Report 2021
Glencore Chief Executive Officer, Gary Nagle:
"Our Industrial operating assets continued to manage responsibly
and effectively amid the health and logistical challenges presented
by Covid-19, while, from a market perspective, we remain
disciplined in a recovering, yet somewhat uncertain, global
economic picture. I am particularly pleased to report an improved
safety performance. We relaunched our "SafeWork" program earlier
this year to address underlying issues in historical safety
performance. Unfortunately, we recorded the loss of one life at
Glencore's managed operations in the first half. We remain
relentless in our ambition to achieve a fatality-free business.
"In our key copper and zinc businesses, production met our H1
guidance, while planned coal and nickel volumes were impacted by a
range of factors during the half. Prodeco's care and maintenance
and market-driven Australian supply reductions since H2 2020 are
mainly responsible for a 16% period-on-period decline in coal
production. Nickel production was constrained by various operating
issues at Koniambo, with a restart of its second production line
currently expected in August.
"Our Marketing business has again performed well, with
constructive market conditions allowing us to raise our full year
2021 EBIT expectations to the top end of our $2.2-$3.2 billion p.a.
guidance range.
"In the near term we remain alert to the continuing challenges
of Covid-19, and our operational teams remain focussed on operating
safely and responsibly to create sustainable long-term value for
all stakeholders."
Production from own sources - Total(1)
Change
H1 2021 H1 2020 %
--------------------------------- ------------ ----------- ----------- ------------
Copper kt 598.0 588.1 2
Cobalt kt 14.8 14.3 3
Zinc kt 581.8 550.1 6
Lead kt 117.0 127.9 (9)
Nickel kt 47.7 55.2 (14)
Gold koz 423 411 3
Silver koz 15,984 14,185 13
Ferrochrome kt 773 466 66
Coal - coking mt 4.1 3.7 11
Coal - semi-soft mt 2.6 2.6 -
Coal - thermal mt 42.0 51.8 (19)
--------------------------------- ------------ ----------- ----------- ------------
Coal mt 48.7 58.1 (16)
Oil (entitlement interest basis) kboe 2,557 2,612 (2)
1. Controlled industrial assets and joint ventures only.
Production is on a 100% basis, except as stated later in this
report.
H1 production highlights
-- Own sourced copper and cobalt production of 598,000 tonnes
and 14,800 tonnes, respectively, was modestly higher than H1
2020.
-- Own sourced zinc production of 581,800 tonnes was 31,700
tonnes (6%) higher than H1 2020, mainly relating to recovery from
Covid-related suspensions in Q2 2020, particularly in Peru.
-- Own sourced nickel production of 47,700 tonnes was 7,500
tonnes (14%) below H1 2020 due to planned major maintenance at
Murrin and various operational issues at Koniambo.
-- Own sourced gold and silver production were, respectively, 3% and 13% ahead of H1 2020.
-- Attributable ferrochrome production of 773,000 tonnes was
307,000 tonnes (66%) higher than H1 2020, reflecting that mining
and smelting operations were suspended for much of Q2 2020 due to
the South African national lockdown.
-- Coal production of 48.7 million tonnes was 9.4 million tonnes
(16%) lower than H1 2020, reflecting a full period of Prodeco care
and maintenance (3.8 million tonnes), various movements in the
Australian portfolio, mainly reflecting the continued market-driven
supply reductions initiated in H2 2020 (5.0 million tonnes) and
reduced export rail capacity in South Africa (1.4 million tonnes),
partly offset by the recovery at Cerrejón from its Covid-related
restrictions in the base period.
-- Entitlement interest oil production of 2.6 million barrels of
oil equivalent (boe) was broadly in line with H1 2020, reflecting
the offsetting effects of the Chad oil fields placed on care and
maintenance in April 2020 and the gas phase of the Equatorial
Guinea project commencing in February 2021.
Realised prices
Realised
------------------------
US$ million c/lb $/t
------------ ----------- -----------
Copper 425 9,370
Zinc 128 2,831
Nickel 788 17,372
The average Newcastle coal (NEWC) settlement prices for the
period was $98.85/t. After applying a portfolio mix adjustment
(component of our regular coal cash flow modelling guidance) of
$26.60/t to reflect e.g. movements in the pricing of non-NEWC
quality coals, coking coal margins and the lag effect of 2020's JPU
fixed-price contracts, an average thermal-equivalent realised price
of c.$72.25/t can be applied across all coal sales volumes in H1.
Own sourced copper sales during the period were c.21kt lower than
production and own sourced zinc sales were c.20kt higher than
production.
Production guidance
Actual Previous Current
FY guidance guidance 2021 weighting
2020 2021 2021 H1 H2
------------ ------- -------- --------- --------- --- -------- --------
1,220 1,220
Copper kt 1,258 +/- 30 +/- 30 49% 51%
------------ ---------- -------- --------- --------- --- -------- --------
35 +/- 35 +/-
Cobalt kt 27.4 2 3 42% 58%
------------ ---------- -------- --------- --------- --- -------- --------
1,250 1,170
Zinc kt 1,170 +/- 30 +/- 30 (1) 50% 50%
------------ ---------- -------- --------- --------- --- -------- --------
117 +/- 105 +/-
Nickel kt 110 5 5 45% 55%
------------ ---------- -------- --------- --------- --- -------- --------
1,400 1,430
Ferrochrome kt 1,029 +/- 30 +/- 30 54% 46%
------------ ---------- -------- --------- --------- --- -------- --------
113 +/- 104 +/-
Coal mt 106 4 4 47% 53%
1 Excludes Volcan
-- Changes to guidance mainly reflect: lower H2 for zinc, due to
a lengthier expected ramp-up at the recently-commissioned Zhairem
mine in Kazakhstan; extended maintenance at the Koniambo nickel
plant, delaying a return to a two-line processing operation; and
reduced coal production volumes, on account of export rail
constraints and weaker domestic demand in South Africa and a slower
recovery from the Australian market-driven supply reductions
initiated in H2 2020.
To view the full report please click:
https://www.glencore.com/dam/jcr:9897d2a2-0d44-491f-9912-0728c92e69f4/GLEN_2021-HY_ProductionReport.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 m: +41 79 737 5642 martin.fewings@glencore.com
2880
Media
Charles Watenphul t: +41 41 709 m: +41 79 904 3320 charles.watenphul@glencore.com
2462
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 60 responsibly-sourced commodities that advance everyday
life. The Group's operations comprise around 150
mining,metallurgical and oil production assets.With a strong
footprint in over 35 countries in both established and emerging
regions for natural resources, Glencore's industrial activities are
supported by a global network of more than 30 marketing offices.
Glencore's customers are industrial consumers, suchas those in the
automotive, steel, power generation, battery manufacturing and oil
sectors. We also provide financing, logistics and other services to
producers and consumers of commodities. Glencore's companies employ
around 135,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council onMining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative. Our ambition is to be a net
zero total emissions company by 2050.
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