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Glencore expects 2023 marketing earnings to beat guidance

Glencore CEO Gary Nagle.

Glencore CEO Gary Nagle.

21st July 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Diversified mining and marketing company Glencore expects this year’s marketing earnings to exceed the top end of its guidance range.

The London- and Johannesburg-listed producer and marketer of more than 60 commodities, said on Friday that it expected adjusted marketing earnings before interest and tax to be in the $3.5-billion to $4-billion range, well above its $2.2-billion to $3.2-billion long-term guidance range.

“Glencore continues to be one of our preferred miners,” UK metals and mining analyst Jefferies stated in its ‘buy’ reiteration. Deutsche Bank Research analysts also recommended that the share be bought.

Copper, coal and zinc assets performed in line with expectations and previously communicated guidance, and first-half output was described as being solid.

“Second half volume weightings in copper, zinc and nickel reflect higher expected production volumes from Collahuasi, Kazzinc, Mount Isa and INO,” Glencore CEO Gary Nagle stated in a release to Mining Weekly.

Glencore is due to report overall first-half results on August 8 amid its marketing segment largely normalising. While this will impact profitability, it has allowed for the release of some of the investment made in marketing working capital in 2022.

Regarding own-sourced production, only cobalt and gold production were up in the six months to the end of June, with 488 000 t of copper production 4% down on the corresponding six months of 2022. Copper sales volumes were 11 000 t lower on shipment timing.

Zinc production of 434 700 t was 10% lower reflecting mainly the 2022 disposals of South American zinc operations and the closure of Matagami.

Nickel production of 46 400 t was 20% lower, primarily reflecting higher third-party production, in large part necessitated by last year’s strike at Raglan mine in Canada.

Attributable ferrochrome production of 717 000 t was 9% down on planned additional smelter offline days and coal production of 54.2-million tonnes was 2% lower than in the first half of last year.

Cobalt production of 21 700 t was 5% higher on improved recoveries at the Katanga copper mine in the Democratic Republic of Congo and gold output was up 10% at 369 000 oz.

Jefferies noted that Glencore, which has been active in deals as a buyer and a seller this year, has gone quiet on its bid to merge with Teck Resources and its alternative proposal to acquire Teck’s coal assets and then subsequently demerge the combined company’s coal business through a listing on the New York Stock Exchange.

“We would not consider this lull to be an indication of lack of interest. We expect an update from management when the company reports half-year results,” Jefferies stated.

Edited by Creamer Media Reporter

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