Full Year 2023 Production Report
NEWS RELEASE
Baar, 1 February 2024
Full Year 2023 Production Report
Glencore Chief Executive Officer, Gary Nagle:
"Overall 2023 production was in line with our earlier revised guidance, with stronger second half volumes delivered across our key commodities, including copper, zinc, nickel and coal. Compared to 2022, the moderately lower year-on-year copper and zinc department managed production volumes, primarily reflect disposals of the Cobar copper mine and various South American zinc operations. Nickel volumes fell 9%, owing to higher third-party production at INO and Murrin Murrin maintenance. Coal production was 3% higher, noting the numerous capacity constraints (weather, blockades and logistics) that impacted the base period.
"In this production update, we also provide updated guidance for 2024. Copper in the 950-1,010kt range, reflects the sale of Cobar, as well as cobalt market-related adjustments to operating rates at Mutanda vs previous guidance from our December 2022 Investor Update. Zinc guidance is positioned within a similar range at 900-950kt, while nickel production guidance is 80-90kt, excluding Koniambo (KNS). Coal production is forecast to be steady at the guidance range mid-point of 110Mt, excluding any incremental volumes from the recently announced acquisition of a 77% interest in Teck's steelmaking coal business, currently going through its various approval processes.
"We furthermore expect to report a FY 2023 Marketing Adjusted EBIT result of approximately $3.5 billion, largely repeating H1's run-rate."
Production from own sources - Total1
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2023 |
2022 |
Change % |
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Copper |
kt |
1,010.1 |
1,058.1 |
(5 ) |
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Cobalt |
kt |
41.3 |
43.8 |
(6) |
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Zinc |
kt |
918.5 |
938.5 |
(2) |
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Lead |
kt |
182.7 |
191.6 |
(5) |
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Nickel |
kt |
97.6 |
107.5 |
(9) |
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Gold |
koz |
747 |
661 |
13 |
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Silver |
koz |
20,011 |
23,750 |
(16) |
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Ferrochrome |
kt |
1,162 |
1,488 |
(22) |
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Coal |
mt |
113.6 |
110.0 |
3 |
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1 Controlled industrial assets and joint ventures only. Production is on a 100% basis, except as stated.
Production guidance
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Actual |
Actual |
Actual |
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Guidance |
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2021 |
2022 |
2023 |
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2024 |
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Copper |
kt |
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1,196 |
1,058 |
1,010 |
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950-1,010 |
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Cobalt |
kt |
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31.3 |
43.8 |
41.3 |
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35-40 |
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Zinc |
kt |
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1,118 |
939 |
919 |
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900-950 |
1 |
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Nickel |
kt |
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102 |
108 |
98 |
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80-90 |
2 |
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Ferrochrome |
kt |
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1,468 |
1,488 |
1,162 |
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1,100-1,200 |
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Coal |
mt |
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103 |
110 |
114 |
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105-115 |
3 |
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1 Excludes Volcan.
2 In relation to KNS, we announced in September 2023 that Glencore would not continue to fund ongoing operations from March 2024 and, given such uncertainty, 2024's nickel production guidance above is presented ex-KNS.
3 Guidance excludes any contribution from the Elk Valley Resources (EVR) steelmaking coal assets, in which Glencore agreed in November 2023 to acquire a 77% interest from Teck Resources Limited.
Realised prices
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LME (average 12 months) |
Difference |
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¢/lb |
$/t |
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Copper |
367 |
8,091 |
8,485 |
(5) |
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Zinc |
116 |
2,564 |
2,650 |
(3) |
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Nickel |
851 |
18,761 |
21,487 |
(13) |
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The average Newcastle coal (NEWC) settlement price for 2023 was $173/t. After applying a portfolio mix adjustment (component of our regular coal cash flow modelling guidance) of $32/t to reflect e.g. movements in the pricing of non-NEWC quality coals, coking coal margins and effect of JPU fixed-price contracts, an average thermal-equivalent realised price of c. $141/t can be applied across all coal sales volumes.
Production highlights
• Own sourced copper production of 1,010,100 tonnes was 48,000 tonnes (5%) lower than 2022, primarily reflecting the sale of Cobar in June 2023 and lower copper by-product production outside the Copper department. Own sourced copper sales during the period were some 13,000 tonnes lower than net relevant production, due to the timing of shipments.
• Own sourced cobalt production of 41,300 tonnes was 2,500 tonnes (6%) lower than 2022, mainly due to feed plan adjustments at Mutanda, in the context of an oversupplied market.
• Own sourced zinc production of 918,500 tonnes was 20,000 tonnes (2%) lower than 2022, mainly reflecting the 2022 disposals of South American zinc operations (27,300 tonnes) and the closure of Matagami (17,300 tonnes), offset by stronger production from Kazzinc (Zhairem) and Antamina.
• Own sourced nickel production of 97,600 tonnes was 9,900 tonnes (9%) lower than 2022, primarily reflecting higher INO third party production (versus own sourced) and a planned shutdown of Murrin Murrin for routine maintenance, somewhat offset by a more consistent production performance from Koniambo.
• Attributable ferrochrome production of 1,162,000 tonnes was 326,000 tonnes (22%) lower than 2022, mainly due to planned additional smelter downtime during the 3-month high electricity demand winter season, a period of elevated power prices. Q4 2023 production was 133,000 tonnes (85%) higher than Q3 2023, as the smelter portfolio progressively restarted, albeit with the Rustenburg smelter remaining idle, pending an improved price/cost environment.
• Coal production of 113.6 million tonnes was 3.6 million tonnes (3%) higher than 2022, reflecting higher productivity in South Africa and a year over year easing in certain external factors that constrain capacity, such as wet weather and blockades.
Unit cost guidance
• Aggregate thermal coal unit cost for FY 2023 is expected to be reported moderately below the previous guidance provided alongside our 2023 Half-Year results, primarily reflecting lower royalties. We expect to report higher copper, zinc and nickel FY 2023 unit costs than previous guidance, reflecting increased inflation across key operating regions, as well as the impact of cobalt stockpiling and related non-cash inventory adjustments within copper, a fixed cost volume variance impact for zinc and higher third-party feed production in nickel.
Other matters
• The Group's mineral resources and ore reserves report for 2023 has been published today on our website.
To view the full report please click here: https://www.glencore.com/.rest/api/v1/documents/static/f2f3f568-9437-4c55-bcb6-49d2fc96d305/GLEN_2023-FY_ProductionReport.pdf
For further information please contact:
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Investors |
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Martin Fewings |
t: +41 41 709 2880 |
m: +41 79 737 5642 |
martin.fewings@glencore.com |
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Media |
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Charles Watenphul |
t: +41 41 709 2462 |
m: +41 79 904 3320 |
charles.watenphul@glencore.com |
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Glencore LEI: 2138002658CPO9NBH955
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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 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 support decarbonisation while meeting the energy needs of today.
With around 140,000 employees and contractors and 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.
We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by decarbonising our own operational footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions. Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of our website at glencore.com/publications.
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