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Glencore PLC Earnings Release 2021
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Earnings Release
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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 - Total1
| H1 2021 | H1 2020 | Change % | ||
| 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 | ¢/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 FY |
Previous guidance |
Current guidance | 2021 weighting | ||||||||
| 2020 | 2021 | 2021 | H1 | H2 | |||||||
| Copper | kt | 1,258 | 1,220 ± 30 | 1,220 ± 30 | 49% | 51% | |||||
| Cobalt | kt | 27.4 | 35 ± 2 | 35 ± 3 | 42% | 58% | |||||
| Zinc | kt | 1,170 | 1,250 ± 30 | 1,170 ± 30 | 1 | 50% | 50% | ||||
| Nickel | kt | 110 | 117 ± 5 | 105 ± 5 | 45% | 55% | |||||
| Ferrochrome | kt | 1,029 | 1,400 ± 30 | 1,430 ± 30 | 54% | 46% | |||||
| Coal | mt | 106 | 113 ± 4 | 104 ± 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:
For further information please contact:
| Investors | ||||||
| Martin Fewings | t: +41 41 709 2880 | m: +41 79 737 5642 | [email protected] | |||
| Media | ||||||
| Charles Watenphul | t: +41 41 709 2462 | m: +41 79 904 3320 | [email protected] | |||
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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