Glencore PLC Third Quarter 2022 Production Report (4029E)

TIDMGLEN

RNS Number : 4029E

Glencore PLC

28 October 2022

NEWS RELEASE

Baar, 28 October 2022

Third Quarter 2022 Production Report

Glencore Chief Executive Officer, Gary Nagle:

"Operational performance over the third quarter was impacted by a range of events including extreme weather in Australia, industrial action at nickel assets in Canada and Norway (since resolved) and the emergence of significant supply chain issues in Kazakhstan stemming from the Russia/Ukraine war. Full-year 2022 production guidance has, accordingly, been reduced for those affected commodities.

"Following the exceptionally strong marketing performance in the first half of the year, we currently expect a significantly reduced, but still above-average second-half contribution, likely exceeding $1.6 billion, being the top end of the pro-rated long-term EBIT guidance range of $2.2 to $3.2 billion p.a."

Production from own sources - Total(1)

 
                                           YTD     YTD    Change 
                                           2022    2021      % 
---------------------------------  -----  ------  ------  ------ 
Copper                             kt     770.5   895.5    (14) 
Cobalt                             kt      33.1    23.4     41 
Zinc                               kt     699.6   855.8    (18) 
Lead                               kt     136.9   173.4    (21) 
Nickel                             kt      81.6    71.1     15 
Gold                               koz     504     593     (15) 
Silver                             koz    17,878  23,794   (25) 
Ferrochrome                        kt     1,110   1,071     4 
 
Coal                               mt      81.9    76.3     7 
Oil (entitlement interest basis)   kboe   4,822   4,145     16 
---------------------------------  -----  ------  ------  ------ 
 

1 Controlled industrial assets and joint ventures only. Production is on a 100% basis, except as stated.

Production guidance

Changes in guidance, extensively foreshadowed in our Q2 2022 production report, but requiring passage of time to quantify the various impacts, mainly reflects:

   --       Tightening of the ranges 

-- Zinc down 65kt (6%) - emerging supply-chain issues in Kazakhstan as the secondary impacts of the Russia/Ukraine war are felt throughout the CIS region

-- Nickel down 8kt (7%) - effects of the approximately 15-week strike at Raglan mine and the 10-day strike at Nikkelverk

-- Coal down 11mt (9%) - severe flooding in NSW (also higher than average rainfall in Queensland) and associated delays in restoring mine production and logistics infrastructure (primary NSW export rail line closed for approximately 2 weeks). The La Niña weather pattern exhibits a high probability of causing further disruption in Q4, with a wide plus/minus 4mt range reflecting this.

 
                   Actual  Actual  Actual  Guidance 
                       FY      FY      FY        FY 
                     2019    2020    2021      2022 
------------  ---  ------  ------  ------  -------- 
                                              1,060 
Copper         kt   1,371   1,258   1,196    +/- 20 
------------  ---  ------  ------  ------  -------- 
                                             45 +/- 
Cobalt         kt    46.3    27.4    31.3         2 
------------  ---  ------  ------  ------  -------- 
                                                945 
Zinc           kt   1,078   1,170   1,118    +/- 25 
------------  ---  ------  ------  ------  -------- 
                                                110 
Nickel         kt     121     110     102     +/- 4 
------------  ---  ------  ------  ------  -------- 
                                              1,500 
Ferrochrome    kt   1,438   1,029   1,468    +/- 20 
------------  ---  ------  ------  ------  -------- 
                                                110 
Coal           mt     140     106     103     +/- 4 
------------  ---  ------  ------  ------  -------- 
 
   1    Excludes Volcan. 

Production highlights

-- Own sourced copper production of 770,500 tonnes was 125,000 tonnes (14%) lower than the comparable 2021 period, due to the previously reported land access, geotechnical and processing constraints at Katanga (50,600 tonnes), the basis change arising from the sale of Ernest Henry in January 2022 (34,100 tonnes), Collahuasi lower ore mined due to mine sequencing (23,000 tonnes) and lower copper units produced within Glencore's zinc business.

-- Own sourced zinc production of 699,600 tonnes was 156,200 tonnes (18%) lower than the comparable 2021 period, reflecting progressive reduction in the South American portfolio through disposals and closures (70,700 tonnes), closure of Matagami (20,100 tonnes) and Covid-19 related absenteeism leading to lower development rates and sequence changes at Mount Isa (51,200 tonnes).

-- Own sourced nickel production of 81,600 tonnes was 10,500 tonnes (15%) higher than the comparable 2021 period, reflecting Koniambo operating both production lines in 2022 and stable Murrin Murrin operations, compared to a multi-week shutdown for scheduled maintenance in the base period, partially offset by lower production at INO due to strikes at Raglan and Nikkelverk.

-- Attributable ferrochrome production of 1,110,000 tonnes was 39,000 tonnes (4%) higher than the comparable 2021 period, reflecting consistent smelter performance.

-- Coal production of 81.9 million tonnes was 5.6 million tonnes (7%) higher than the comparable 2021 period, mainly reflecting higher attributable production from Cerrejón, following the acquisition in January 2022 of the remaining two-thirds interest that Glencore did not already own. On a like for like basis, overall Group production declined by 5.6 million tonnes (6%) reflecting lower tonnes from South Africa.

-- Entitlement interest oil production of 4.8 million barrels of oil equivalent was 0.7 million barrels (16%) higher than the comparable 2021 period, due to commencement of the gas phase of the Alen project in Equatorial Guinea from March 2021.

Other matters

-- Following the exceptionally strong marketing performance in the first half of the year, we currently expect a significantly reduced, but still above-average second-half contribution, likely exceeding $1.6 billion, being the top end of the pro-rated long-term EBIT guidance range of $2.2 to $3.2 billion p.a.

-- Glencore's investor update will be held on 6 December 2022. Further details will be published on our website in due course.

To view the full report please click: https://www.glencore.com/dam/jcr:d6c949c7-bc62-4b81-9bc3-853becbdc371/GLEN_2022-Q3_ProductionReport.pdf

For further information please contact:

 
Investors 
Martin Fewings     t: [phone]   m: [phone]   [e-mail] 
 
Media 
Charles Watenphul  t: [phone]  m: [phone]  [e-mail] 
 
 

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 responsibly-sourced 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 enable decarbonisation while meeting the energy needs of today.

Glencore companies employ around 135,000 people, including contractors. With 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.

Glencore recognises our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement. Our ambition is to be a net zero total emissions company by 2050. In August 2021, we increased our medium-term emission reduction target to a 50% reduction by 2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019 levels.

Important notice concerning this document including forward looking statements

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October 28, 2022 02:00 ET (06:00 GMT)