Glencore’s copper output fell 9 percent in the first half of 2017 compared with the same period last year, the company said on Monday, as the mining and trading house produced more zinc at its Antamina project. In its half-year production report, Glencore said copper output – on which it is more heavily focused than rival miners – dropped to 642,900 tonnes. The company said this was down to:
Transition to mining a greater portion of copper/zinc ores at Antamina (noting concurrent higher zinc grades/production), temporary lower copper grades at Antapaccay, the effects of wet weather at Mutanda resulting in reduced ore throughput, and lower production / pit stability issues at Alumbrera as it nears end of life.
Copper prices hit a two-year high of $6,400 a tonne on the London Metal Exchange this week, partly due to China moving to curb imports of scrap metal next year, which should boost demand for refined metal. Glencore said the shift at its Antamina mine boosted its total zinc output by 13 per cent, combined with “generally solid performances across the [zinc] portfolio”. In other metals and commodities, coal output rose 4 per cent in the first half to 61.1m tonnes, led by increases at the company’s Australian mines. Nickel output declined 10 per cent to 51,200 tonnes primarily due to maintenance. Glencore’s oil entitlement fell 39 percent to 2.6m barrels due to field declines in Chad.
Tyler Broda at RBC Capital markets said:
Production is expected to recover in H2, however not all of the delays will be caught up, resulting in a 2-4% reduction in copper, coal and nickel production guidance. Zinc guidance is reduced by 5% as the Trevali assets will be removed from group production from the start of August, but is unchanged on an adjusted basis following stronger zinc grades at Antamina (that are expected to persist for some time yet). The revised guidance looks achievable in our view as there should be more uptime from the processing side and the traditional H2 skew to higher production should arise, especially in coal.
Source: www.ft.com
