Glencore, the world’s largest miner by revenue, has recently released its production figures for the period, revealing declines across most of its portfolio. However, the company did report stronger volumes during the second half of the year for its key commodities. Let’s take a closer look at the details:
Glencore’s own sourced copper production reached 1,010,100 metric tons, which is 48,000 tons (5%) lower than the previous year (2022). This decline can be attributed to the sale of Cobar in June 2023 and a decrease in copper by-product production outside the Copper department. Additionally, copper sales during this period were approximately 13,000 tons lower than the net relevant production due to shipment timing.
The company’s own sourced cobalt production amounted to 41,300 tons, marking a decline of 2,500 tons (6%) compared to 2022. This decrease primarily stems from feed plan adjustments at Mutanda in response to an oversupplied market.
Glencore’s own sourced zinc production stood at 918,500 tons, which is 20,000 tons (2%) lower than the previous year (2022). This decline is mainly attributed to the disposals of South American zinc operations in 2022 (27,300 tons) and the closure of Matagami (17,300 tons). However, these losses were somewhat offset by stronger production from Kazzinc (Zhairem) and Antamina.
The company reported an own sourced nickel production of 97,600 tons, reflecting a decline of 9,900 tons (9%) compared to 2022. This decrease is primarily a result of higher third-party production from INO (compared to own sourced) and a planned shutdown of Murrin Murrin for routine maintenance. However, there was some compensation from a more consistent production performance from Koniambo.
Details on attributable ferrochrome production were not provided in the report.
Despite these declines in production across various commodities, Glencore remains a key player in the global mining industry. The company will continue to adapt its strategies to optimize productivity and navigate market dynamics.
Ferrochrome Production Declines in 2023
Despite challenges faced during the winter season, the attributable ferrochrome production in 2023 reached 1,162,000 tons. However, this figure was 22% lower compared to the previous year. The decrease was primarily due to planned smelter downtime and the high electricity demand during this period. As a result, power prices were elevated, causing a reduction in production levels.
Positive Growth in 4Q 2023 Production
During the fourth quarter of 2023, there was a substantial increase in production. The figures reached 133,000 tons, marking an 85% growth compared to the previous quarter. The majority of the smelters resumed operations, with the exception of the Rustenburg smelter which remained idle. This decision was made pending an improved price/cost environment.
Improved Coal Production in South Africa
Coal production in 2023 amounted to 113.6 million tons, reflecting a positive growth of 3% compared to the previous year. This increase was mainly attributed to improved productivity in South Africa. Additionally, certain external constraints that had previously affected capacity, such as wet weather and blockades, eased during this period.
Unit Cost Guidance
The unit cost guidance for various resources in FY 2023 differs. The aggregate thermal coal unit cost is expected to be reported moderately below the previous guidance provided alongside the 2023 Half-Year results. This adjustment primarily reflects lower royalties.
On the other hand, FY 2023 unit costs for copper, zinc, and nickel are expected to be higher than previous guidance. The increase is due to inflation across key operating regions and the impact of cobalt stockpiling. Furthermore, non-cash inventory adjustments within copper and fixed cost volume variance impact for zinc contribute to the projected higher costs. In the case of nickel, increased third-party feed production is also a contributing factor.
At 0951 GMT, shares showed a positive performance, increasing by 7.40 pence or 1.8%. The closing price stood at 427.85 pence.