Glencore shares close lower after production targets are revised
Glencore said its first quarter production forecast showed that the copper output would be 7 percent lower at 320 700 tons compared to the similar period last year.
The shares eased 3.71 percent lower to R56 during the day before settling 3.32 percent lower at R56.23.
The group blamed the subdued output on severe flooding in its Queensland, Australia, unit; safety- related stoppages and smelter outages at Mopani, Zambia; open-cut depletion at Alumbrera in Argentina; and the sale of the Punitaqui mine in Chile last year.
Glencore said the lower copper production target was ascribed to safety and smelter outages and a range of mine-plan updates at other operations.
It said copper and cobalt production at Katanga Mining in Zambia was also expected to decline. Production guidance would become available once a business review was completed in the third quarter.
However, the Katanga cathode production of 57 175 tons was in line with expectations.
The mine’s cobalt sales were halted in November last year after excess uranium was detected, but Glencore said some sales resumed last month, while a plant to remove radiation contamination would be ready this year.
Long-term production of 300 000 tons per year (tp/a) of copper cathode and 30 000 tp/a of cobalt contained in hydroxide on average, over life-of-mine remains unchanged.
Glencore’s own-sourced cobalt first quarter production at 10 900 tons was 3 900 tons or 56 percent more than in the first quarter of 2018.
Nickel production fell primarily, reflecting a weaker than expected start to the year at Koniambo in New Caledonia. Nickel eased 10 percent compared to the first quarter of 2018 following severe weather in Canada and maintenance at Koniambo.
Ferrochrome production for 2019 was expected to be 3 percent lower than expected due to maintenance and extended winter shutdowns, and power problems in South Africa.
Attributable ferrochrome production of 402 000 tons in Q1 2019 was in line with the same time a year ago.
The target for oil was also lowered by 11 percent due to approval delays in Cameroon.
Coal production of 33.2 million tons in the first quarter was 8 percent higher than Q1 2019.
BUSINESS REPORT
Source: iol.co.za
