The ramp up of diversified miner Glencore’s Katanga mine, in the Democratic Republic of Congo (DRC), has delivered increased copper and cobalt for the first half of this year, in line with full-year guidance, which is 1.4-million tonnes of copper and 39 000 t of cobalt.
Financial services company Credit Suisse commented that Glencore’s organic volume growth is driving earnings growth over the next one to two years, owing to a ramp-up in production at its copper operations in the DRC and its zinc operations in Australia.
Glencore expects to report interim earnings before interest, taxation, depreciation and amortisation of $8.3-billion, and earnings a share of $0.18.
The company reported own-sourced copper production of 696 200 t for the first half of this year, which is 8%, or 53 300 t, higher than the first half of 2017. Cobalt production of 16 700 t for the period was 31%, or 4 000 t, higher than the first half of 2017.
Adjusting for the African zinc assets sold to Trevali Mining in August 2017, own-sourced zinc production of 498 200 t was in line with the first half of 2017. Mining operations have restarted at Lady Loretta (Mount Isa, in Australia), supporting an increased full-year production run-rate.
Own-sourced nickel production of 62 200 t was 21%, or 11 000 t, higher than the first half of 2017, as a result of the second processing line at the Koniambo mine, in New Caledonia, having entered production.
Attributable ferrochrome production of 818 000 t was in line with that of the first half of 2017.
Coal production of 62-million tonnes was also in line with the first half of 2017, reflecting certain offsetting factors. Cyclone Debbie in Australia disrupted production in the first half of 2017, while the current period includes production from the recently acquired Hunter Valley Operations joint venture, from May.
The company previously indicated that Prodeco, in Colombia, is undertaking significant additional overburden removal, affecting nearby production volumes of coal.
Glencore's coal guidance has been revised to 132-million tonnes, down with two-million-tonnes as prevously indicated.
Entitlement interest oil production of 2.3-million barrels was 13% below the mark set in the first quarter of 2017, mainly reflecting expected declines in the liquids phase of the Equatorial Guinea offshore fields. The Chad drilling campaign that started mid-2017 delivered increased production of 9% over the second half of 2017, whereas it remained stable in the first half of 2017.
Credit Suisse said Glencore is on track to deliver peer-leading volume growth over the next three years, as well as earnings growth. The agency estimates a compounded yearly growth rate in volumes of around 7% for Glencore over the next three years.