NEWS RELEASE
Baar, 1 February 2024
Full Year 2023 Production
Report
Glencore Chief Executive Officer, Gary
Nagle:
"Overall 2023 production was in line with our earlier revised
guidance, with stronger second half volumes delivered across our
key commodities, including copper, zinc, nickel and coal. Compared
to 2022, the moderately lower year-on-year copper and zinc
department managed production volumes, primarily reflect disposals
of the Cobar copper mine and various South American zinc
operations. Nickel volumes fell 9%, owing to higher third-party
production at INO and Murrin Murrin maintenance. Coal production
was 3% higher, noting the numerous capacity constraints (weather,
blockades and logistics) that impacted the base
period.
"In this production update, we also provide updated guidance
for 2024. Copper in the 950-1,010kt range, reflects the sale of
Cobar, as well as cobalt market-related adjustments to operating
rates at Mutanda vs previous guidance from our December 2022
Investor Update. Zinc guidance is positioned within a similar range
at 900-950kt, while nickel production guidance is 80-90kt,
excluding Koniambo (KNS). Coal production is forecast to be steady
at the guidance range mid-point of 110Mt, excluding any incremental
volumes from the recently announced acquisition of a 77% interest
in Teck's steelmaking coal business, currently going through its
various approval processes.
"We furthermore expect to report a FY 2023 Marketing Adjusted
EBIT result of approximately $3.5 billion, largely repeating H1's
run-rate."
Production
from own sources - Total1
|
|
|
|
|
|
|
2023
|
2022
|
Change %
|
Copper
|
kt
|
1,010.1
|
1,058.1
|
(5 )
|
Cobalt
|
kt
|
41.3
|
43.8
|
(6)
|
Zinc
|
kt
|
918.5
|
938.5
|
(2)
|
Lead
|
kt
|
182.7
|
191.6
|
(5)
|
Nickel
|
kt
|
97.6
|
107.5
|
(9)
|
Gold
|
koz
|
747
|
661
|
13
|
Silver
|
koz
|
20,011
|
23,750
|
(16)
|
Ferrochrome
|
kt
|
1,162
|
1,488
|
(22)
|
Coal
|
mt
|
113.6
|
110.0
|
3
|
|
|
|
|
|
1 Controlled industrial assets
and joint ventures only. Production is on a 100% basis, except as
stated.
Production
guidance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY
|
Actual
FY
|
Actual
FY
|
|
Guidance
FY
|
|
|
|
|
|
2021
|
2022
|
2023
|
|
2024
|
|
Copper
|
kt
|
|
|
1,196
|
1,058
|
1,010
|
|
950-1,010
|
|
Cobalt
|
kt
|
|
|
31.3
|
43.8
|
41.3
|
|
35-40
|
|
Zinc
|
kt
|
|
|
1,118
|
939
|
919
|
|
900-950
|
1
|
Nickel
|
kt
|
|
|
102
|
108
|
98
|
|
80-90
|
2
|
Ferrochrome
|
kt
|
|
|
1,468
|
1,488
|
1,162
|
|
1,100-1,200
|
|
Coal
|
mt
|
|
|
103
|
110
|
114
|
|
105-115
|
3
|
|
|
|
|
|
|
|
|
|
|
1 Excludes Volcan.
2 In relation to KNS, we announced
in September 2023 that Glencore would not continue to fund ongoing
operations from March 2024 and, given such uncertainty, 2024's
nickel production guidance above is presented
ex-KNS.
3 Guidance excludes any contribution from the
Elk Valley Resources (EVR) steelmaking coal assets, in
which Glencore agreed in November 2023 to acquire a 77% interest
from Teck Resources Limited.
Realised
prices
|
|
|
|
|
|
Realised
|
LME (average 12 months)
$/t
|
Difference
%
|
|
¢/lb
|
$/t
|
Copper
|
367
|
8,091
|
8,485
|
(5)
|
Zinc
|
116
|
2,564
|
2,650
|
(3)
|
Nickel
|
851
|
18,761
|
21,487
|
(13)
|
|
|
|
|
|
The average Newcastle coal (NEWC)
settlement price for 2023 was $173/t. After applying a portfolio
mix adjustment (component of our regular coal cash flow modelling
guidance) of $32/t to reflect e.g. movements in the pricing of
non-NEWC quality coals, coking coal margins and effect of JPU
fixed-price contracts, an average thermal-equivalent realised price
of c. $141/t can be applied across all coal sales
volumes.
Production
highlights
• Own sourced copper production of 1,010,100 tonnes was 48,000
tonnes (5%) lower than 2022, primarily reflecting the sale of Cobar
in June 2023 and lower copper by-product production outside the
Copper department. Own sourced copper sales during the period were
some 13,000 tonnes lower than net relevant production, due to the
timing of shipments.
•
Own sourced cobalt production of
41,300 tonnes was 2,500 tonnes (6%) lower than 2022, mainly due to
feed plan adjustments at Mutanda, in the context of an oversupplied
market.
• Own sourced zinc production of 918,500 tonnes was 20,000
tonnes (2%) lower than 2022, mainly reflecting the 2022 disposals
of South American zinc operations (27,300 tonnes) and the closure
of Matagami (17,300 tonnes), offset by stronger production from
Kazzinc (Zhairem) and Antamina.
• Own sourced nickel production of 97,600 tonnes was 9,900
tonnes (9%) lower than 2022, primarily reflecting higher INO third
party production (versus own sourced) and a planned shutdown of
Murrin Murrin for routine maintenance, somewhat offset by a more
consistent production performance from Koniambo.
• Attributable ferrochrome production of 1,162,000 tonnes was
326,000 tonnes (22%) lower than 2022, mainly due to planned
additional smelter downtime during the 3-month high electricity
demand winter season, a period of elevated power prices. Q4 2023
production was 133,000 tonnes (85%) higher than Q3 2023, as the
smelter portfolio progressively restarted, albeit with the
Rustenburg smelter remaining idle, pending an improved price/cost
environment.
• Coal production of 113.6 million tonnes was 3.6 million tonnes
(3%) higher than 2022, reflecting higher productivity in South
Africa and a year over year easing in certain external factors that
constrain capacity, such as wet weather and blockades.
Unit cost
guidance
• Aggregate thermal coal unit cost for FY 2023 is expected to be
reported moderately below the previous guidance provided alongside
our 2023 Half-Year results, primarily reflecting lower royalties.
We expect to report higher copper, zinc and nickel FY 2023 unit
costs than previous guidance, reflecting increased inflation across
key operating regions, as well as the impact of cobalt stockpiling
and related non-cash inventory adjustments within copper, a fixed
cost volume variance impact for zinc and higher third-party feed
production in nickel.
Other
matters
• The Group's mineral resources and ore reserves report for 2023
has been published today on our website.
To view the
full report please click here:
https://www.glencore.com/.rest/api/v1/documents/static/f2f3f568-9437-4c55-bcb6-49d2fc96d305/GLEN_2023-FY_ProductionReport.pdf
For further information please
contact:
Investors
|
|
|
|
Martin Fewings
|
t: +41 41 709 2880
|
m: +41 79 737 5642
|
martin.fewings@glencore.com
|
Media
|
|
|
|
Charles Watenphul
|
t: +41 41 709 2462
|
m: +41 79 904 3320
|
charles.watenphul@glencore.com
|
|
|
|
|
|
|
|
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Please refer to the end of this document for
disclaimers including on forward-looking statements.
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 commodities that advance everyday life.
Through a network of assets, customers and suppliers that spans the
globe, we produce, process, recycle, source, market and distribute
the commodities that support decarbonisation while meeting the
energy needs of today.
With around 140,000 employees and contractors and a
strong footprint in over 35 countries in both established and
emerging regions for natural resources, our marketing and
industrial activities are supported by a global network of more
than 40 offices.
Glencore's customers are industrial consumers, such
as 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 is proud to be a member of the Voluntary
Principles on Security and Human Rights and the International
Council on Mining and Metals. We are an active participant in the
Extractive Industries Transparency Initiative.
We recognise our responsibility to contribute to the
global effort to achieve the goals of the Paris Agreement by
decarbonising our own operational footprint. We believe that we
should take a holistic approach and have considered our commitment
through the lens of our global industrial emissions. Against a 2019
baseline, we are committed to reducing our Scope 1, 2 and 3
industrial emissions by 15% by the end of 2026, 50% by the end of
2035 and we have an ambition to achieve net zero industrial
emissions by the end of 2050. For more detail see our 2022 Climate
Report on the publication page of our website at
glencore.com/publications.
Important notice concerning this document
including forward looking statements
This document contains statements
that are, or may be deemed to be, "forward-looking statements"
which are prospective in nature. Such statements may include
(without limitation) statements in respect of trends in commodity
prices and currency exchange rates; demand for commodities;
reserves and resources and production forecasts; expectations,
plans, strategies and objectives of management; climate scenarios;
sustainability performance (including, without limitation,
environmental, social and governance) related goals, ambitions,
targets, intentions, visions, milestones and aspirations; approval
of certain projects and consummation of certain transactions
(including, without limitation, acquisitions and disposals);
closures or divestments of certain assets, operations or facilities
(including, without limitation, associated costs); capital costs
and scheduling; operating costs and supply of materials and skilled
employees; financings; anticipated productive lives of projects,
mines and facilities; provisions and contingent liabilities; and
tax, legal and regulatory developments.
These forward-looking statements may
be identified by the use of forward-looking terminology, or the
negative thereof including, without limitation, "outlook",
"guidance", "trend", "plans", "expects", "continues", "assumes",
"is subject to", "budget", "scheduled", "estimates", "aims",
"forecasts", "risks", "intends", "positioned", "predicts",
"projects", "anticipates", "believes", or variations of such words
or comparable terminology and phrases or statements that certain
actions, events or results "may", "could", "should", "shall",
"would", "might" or "will" be taken, occur or be achieved. The
information in this document provides an insight into how we
currently intend to direct the management of our businesses and
assets and to deploy our capital to help us implement our strategy.
The matters disclosed in this document are a 'point in time'
disclosure only. Forward-looking statements are not based on
historical facts, but rather on current predictions, expectations,
beliefs, opinions, plans, objectives, goals, intentions and
projections about future events, results of operations, prospects,
financial conditions and discussions of strategy, and reflect
judgments, assumptions, estimates and other information available
as at the date of this document or the date of the corresponding
planning or scenario analysis process.
By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements
to differ materially from any future event, results, performance,
achievements or other outcomes expressed or implied by such
forward-looking statements. Important factors that could impact
these uncertainties include (without limitation) those disclosed in
the risk management section of our latest Annual Report and
Half-Year Report (which can each be found on our website). These
risks and uncertainties may materially affect the timing and
feasibility of particular developments. Other factors which impact
risks and uncertainties include, without limitation: the ability to
produce and transport products profitably; demand for our products;
changes to the assumptions regarding the recoverable value of our
tangible and intangible assets; changes in environmental scenarios
and related regulations, including (without limitation) transition
risks and the evolution and development of the global transition to
a low carbon economy; recovery rates and other operational
capabilities; health, safety, environmental or social performance
incidents; natural catastrophes or adverse geological conditions,
including (without limitation) the physical risks associated with
climate change; the outcome of litigation or enforcement or
regulatory proceedings; the effect of foreign currency exchange
rates on market prices and operating costs; actions by governmental
authorities, such as changes in taxation or regulation or changes
in the decarbonisation plans of other countries; and political
uncertainty.
Readers, including (without
limitation) investors and prospective investors, should review and
take into account these risks and uncertainties (as well as the
other risks identified in this document) when considering the
information contained in this document. Readers should also note
that the high degree of uncertainty around the nature, timing and
magnitude of climate-related risks, and the uncertainty as to how
the energy transition will evolve, makes it difficult to determine
and disclose the risks and their potential impacts with precision.
Neither Glencore nor any of its affiliates, associates, employees,
directors, officers or advisers, provides any representation,
warranty, assurance or guarantee that the occurrence of the events,
results, performance, achievements or other outcomes expressed or
implied in any forward-looking statements in this document will
actually occur. Glencore cautions readers against reliance on any
forward-looking statements contained in this document, particularly
in light of the long-term time horizon which this report discusses
and the inherent uncertainty in possible policy, market and
technological developments in the future.
No statement in this document is
intended as any kind of forecast (including, without limitation, a
profit forecast or a profit estimate), guarantees or predictions of
future events or performance and past performance cannot be relied
on as a guide to future performance. Neither Glencore nor any of
its affiliates, associates, employees, directors, officers or
advisers, provides any representation, warranty, assurance or
guarantee as to the accuracy, completeness or correctness,
likelihood of achievement or reasonableness of any forward-looking
information contained in this document.
Glencore operates in a dynamic and
uncertain market and external environment. Plans and strategies can
and must adapt in response to dynamic market conditions, joint
venture decisions, new opportunities that might arise or other
changing circumstances. Investors should not assume that our
strategy on climate change will not evolve and be updated as time
passes. Additionally, a number of aspects of our strategy involve
developments or workstreams that are complex and may be delayed,
more costly than anticipated or unsuccessful for many reasons,
including (without limitation) reasons that are outside of
Glencore's control.
There are inherent limitations to
scenario analysis and it is difficult to predict which, if any, of
the scenarios might eventuate. Scenario analysis relies on
assumptions that may or may not be, or prove to be, correct and
that may or may not eventuate and scenarios may also be impacted by
additional factors to the assumptions disclosed. Given these
limitations we treat these scenarios as one of several inputs that
we consider in our climate strategy.
Due to the inherent uncertainty and
limitations in measuring greenhouse gas (GHG) emissions and
operational energy consumption under the calculation methodologies
used in the preparation of such data, all CO2e emissions
and operational energy consumption data or volume references
(including, without limitation, ratios and/or percentages) in this
document are estimates. There may also be differences in the manner
that third parties calculate or report such data compared to
Glencore, which means that third-party data may not be comparable
to Glencore's data. For information on how we calculate our
emissions and operational energy consumption data, see our latest
Basis of Reporting,
Climate Report and
Extended ESG Data, which
can be found on our website.
This document does not constitute or
form part of any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for any
securities.
Except as required by applicable
regulations or by law, Glencore is not under any obligation, and
Glencore and its affiliates expressly disclaim any intention,
obligation or undertaking, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. This document shall not, under any circumstances,
create any implication that there has been no change in the
business or affairs of Glencore since the date of this document or
that the information contained herein is correct as at any time
subsequent to its date. Certain statistical and other information
included in this document is sourced from publicly available
third-party sources. As such it has not been independently verified
and presents the view of those third parties, but may not
necessarily correspond to the views held by Glencore and Glencore
expressly disclaims any responsibility for, or liability in respect
of, and makes no representation or guarantee in relation to, such
information (including, without limitation, as to its accuracy,
completeness or whether it is current). Glencore cautions readers
against reliance on any of the industry, market or other
third-party data or information contained in this
report.
Subject to any terms implied by law
which cannot be excluded, Glencore accepts no responsibility for
any loss, damage, cost or expense (whether direct or indirect)
incurred by any person as a result of any error, omission or
misrepresentation in information in this report.
The companies in which Glencore plc
directly and indirectly has an interest are separate and distinct
legal entities. In this document, "Glencore", "Glencore group" and
"Group" are used for convenience only where references are made to
Glencore plc and its subsidiaries in general. These collective
expressions are used for ease of reference only and do not imply
any other relationship between the companies. Likewise, the words
"we", "us" and "our" are also used to refer collectively to members
of the Group or to those who work for them. These expressions are
also used where no useful purpose is served by identifying the
particular company or companies.