https://www.miningweekly.com

Glencore hikes coal cost savings forecast by 50%

31st October 2018

By: Reuters

  

Font size: - +

MELBOURNE – Recent mine acquisitions have helped Glencore achieve 50% more cost savings in its coal business than it had targeted, the world's biggest exporter of coal for power plants said on Wednesday.

Glencore had expected to achieve annual cash savings of more than $300-million in its coal business by the end of 2018 in a two-year cost-cutting drive, but on Wednesday said it now expects savings of more than $450-million by year-end.

The company now expects its mine unit costs to fall to $49 a tonne in 2019, from a forecast of $52 for 2018, from its operations in Australia, Colombia and South Africa, it said in a presentation to analysts on a tour of its Australian coal mines.

"(The firm has achieved) strong unit cost performance despite material cost headwinds from energy, royalties and higher consumable costs," it said in slides prepared for the tour.

The cost-cutting comes as the company, whose own coal sales make up about 12% of the seaborne thermal market, is boosted by strong coal prices, driven by rising demand in Asia.

The growth in Asia comes just as investment in new coal production has slumped and as the energy content of traded coal has dropped compared with the average energy content of coal sold by Glencore, the company said.

It added that it expected to produce 145-million tonnes of coal in 2019, which could generate $6.2-billion in earnings before interest, tax, depreciation and amortisation (Ebitda) at a spot price of $108 a tonne for Newcastle coal.

Glencore earlier this year completed the acquisitions of the Hail Creek coal mine in Australia and a 49% stake in the Hunter Valley Operations (HVO) from Rio Tinto in a joint venture with Yancoal Australia.

Hail Creek is expected to be the biggest earner of its top 12 coal complexes in 2019 and HVO the sixth biggest, Glencore said, without giving specific forecasts for Ebitda from those mines.

The HVO joint venture has already cut nearly a fifth of its full-time workers and removed 13% of trucks without affecting production levels, Glencore said.

Edited by Reuters

Comments

Showroom

Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 
Yale Lifting Solutions
Yale Lifting Solutions

Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.102 0.139s - 90pq - 2rq
Subscribe Now