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Glencore PLC (GLEN)

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Wednesday 03 February, 2021

Glencore PLC

Full Year 2020 Production Report

RNS Number : 7648N
Glencore PLC
03 February 2021
 

NEWS RELEASE

Baar, 3 February 2021

Full Year 2020 Production Report

 

 

Glencore Chief Executive Officer, Ivan Glasenberg:

"Our mining assets performed well in difficult circumstances during 2020. Various precautionary operating changes made in Q2 continued into the second half, with sustainable and safe working practices embedded for the pandemic era. Production picked up accordingly, with year-over-year increases in zinc, gold and silver production.

"Excluding Mutanda (currently on care and maintenance), 2020 copper production was in line with 2019, while cobalt production was 6,200 tonnes higher, reflecting Katanga's continued successful ramp-up to design capacity levels. Required Covid-19 related mandatory suspensions and international mobility restrictions significantly impacted 2020 production of ferrochrome in South Africa, oil in Chad and nickel at Koniambo. Furthermore, various proactive market-related supply reductions were initiated in H2 2020, primarily with respect to coal production from Australia.

"As noted at our recent 2020 Investor Update, we continue to progress portfolio optimisation, and, in this regard, recently agreed terms for the sale of Mopani to an existing minority shareholder. Work continues to advance options around other non-core assets within the Group."

Production from own sources - Total1

 

 

 

 

 

 

 

 

 

 

2020

2019

Change
%

Copper

           kt

  1,258.1

  1,371.2

  (8)

Cobalt

  kt

  27.4

  46.3

  (41)

Zinc

  kt

  1,170.4

  1,077.5

  9

Lead

  kt

  259.4

  280.0

  (7)

Nickel

  kt

  110.2

  120.6

  (9)

Gold

  koz

  916

  886

  3

Silver

  koz

  32,766

  32,018

  2

Ferrochrome

  kt

  1,029

  1,438

  (28)

 

 

 

 

 

Coal - coking

  mt

  7.6

  9.2

  (17)

Coal - semi-soft

  mt

  4.6

  6.4

  (28)

Coal - thermal

  mt

  94.0

  123.9

  (24)

Coal

  mt

  106.2

  139.5

  (24)

 

 

 

 

 

Oil (entitlement interest basis)

  kbbl

  3,944

  5,518

  (29)

 

 

 

 

 

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

 

 

Production guidance

FY 2021 guidance as per our investor presentation in December 2020 is still current.

Changes versus 2020 reflect:

Katanga cobalt production continuing to ramp up to steady-state capacity

Commissioning of Zhairem zinc/lead project in Kazakhstan

Chrome smelters running throughout the year following a Covid-disrupted 2020

Cautious coal supply increases in Australia, following market-driven reductions in H2 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual
FY

Actual
FY

Actual
FY

 

Guidance
FY

 

 

 

 

 

2018

2019

2020

 

2021

 

Copper

  kt

 

 

  1,454

  1,371

  1,258

 

  1,220 ± 30

1

Cobalt

  kt

 

 

  42.2

  46.3

  27.4

 

  35 ± 2

 

Zinc

  kt

 

 

  1,068

  1,078

  1,170

 

  1,250 ± 30

2

Nickel

  kt

 

 

  124

  121

  110

 

  117 ± 5

 

Ferrochrome

  kt

 

 

  1,580

  1,438

  1,029

 

  1,400 ± 30

 

Coal

  mt

 

 

  129

  140

  106

 

  113 ± 4

 

 

 

 

 

 

 

 

 

 

 

1 Excludes Mopani.

2 Excludes Volcan.

 

Realised prices

 

 

 

 


Realised

US$ million

¢/lb

$/t

Copper

  285

  6,283

Zinc

  102

  2,242

Nickel

  619

  13,647

 

 

 

The average Newcastle coal (NEWC) settlement price for the period was $60.45/t. After applying a portfolio mix adjustment (component of our regular coal cash flow modelling guidance) of $3.60/t to reflect, amongst other factors, movements in pricing of non-NEWC quality

coals, an average price of c.$56.8/t was realised across all coal sales volumes.

 

Production highlights

Own sourced copper production of 1,258,100 tonnes was 113,100 tonnes (8%) lower than 2019, mainly reflecting Mutanda being on care and maintenance in 2020 (partly offset by Katanga's successful ramp-up), with Covid-19 related suspensions being a much smaller factor.

Own sourced cobalt production of 27,400 tonnes was 18,900 tonnes (41%) lower than 2019, mainly reflecting Mutanda on care and maintenance. On a standalone basis, Katanga's cobalt production was up 6,800 tonnes (40%).

Own sourced zinc production of 1,170,400 tonnes was 92,900 tonnes (9%) higher than 2019, mainly reflecting: (i) higher zinc content from Antamina (40,000 tonnes); (ii) improved output from the Mount Isa operations (27,800 tonnes); and (iii) the net positive effect of 18,700 tonnes from Other South America, owing to restarting the short-life Iscaycruz mine in Peru, offset by Covid-related suspensions and shutdowns.

Own sourced nickel production of 110,200 tonnes was 10,400 tonnes (9%) lower than 2019, reflecting Koniambo operating as a single-line operation for the majority of 2020, with Covid-related mobility restrictions affecting its maintenance schedule. The expected decline in grades at the existing Sudbury mines (INO) also contributed.

Attributable ferrochrome production of 1,029,000 tonnes was 409,000 tonnes (28%) lower than 2019, reflecting the South African lockdown and resulting suspension of smelting operations in Q2, with a phased restart thereafter. Lydenburg smelter has been placed on extended care and maintenance. The remaining four smelters were fully operational from Q4, resulting in materially higher quarter on quarter production.

Coal production of 106.2 million tonnes was 33.3 million tonnes (24%) lower than in 2019, reflecting the impacts of the pandemic via stopped or reduced work in Colombia and South Africa, extended care and maintenance at Prodeco, plus market-related supply reductions in Australia in H2 2020.

Entitlement interest oil production of 3.9 million barrels was 1.6 million barrels (29%) lower than 2019. Operated fields in Chad were placed on care and maintenance in March/April 2020 and are yet to be restarted, given continued pandemic-related challenges in international mobility (2.2 million barrels decrease). The balance reflects year over year production increases in Equatorial Guinea and Cameroon since new wells were drilled.

Other matters

In January 2021, Glencore agreed terms for the sale of its interest in Mopani to ZCCM, with completion expected in H1 2021.

Glencore also published its 2020 Resources and Reserves report today.

 

To view the full report please click:
http://www.glencore.com/dam/jcr:9a549d01-c619-4e0d-b043-403a417bd79b/GLEN_2020-Q4_ProductionReport.pdf 

For further information please contact:

Investors

 

Martin Fewings

t: +41 41 709 2880

m: +41 79 737 5642

[email protected]
 

 

 

 

 

Media

 

Charles Watenphul

t: +41417092462

m: +41 799043320

[email protected]

 

 

 

 

         

www.glencore.com  


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 and metallurgical sites 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, 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's companies employ around 145,000 people, including contractors.

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. Our ambition is to be a net zero total emissions company by 2050.

Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, "Glencore", "Glencore group" and "Group" are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies.  Likewise, the words "we", "us" and "our" are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

 

Important notice concerning this document including forward looking statements

This document contains statements that are, or may be deemed to be, "forward looking statements" which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as "outlook", "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled", "estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", "shall", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are not based on historical facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events, results of operations, prospects, financial condition and discussions of strategy.

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For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in taxation or regulation, and political uncertainty.

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The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, "Glencore", "Glencore group" and "Group" are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words "we", "us" and "our" are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

 

 

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