Diversified miner Glencore reported a strong production performance for the first six months of this year, with its key assets largely performing in line with expectations and previously communicated guidance, CEO Gary Nagle says.

For the second quarter, ended June 30, own sourced production volumes were higher in zinc, nickel, gold, steelmaking coal and energy coal, compared with production in the quarter ended March 31.

“The full-year 2026 production guidance for copper, zinc and nickel remains unchanged, while the mid-points of energy and steelmaking coal guidance are up by one-million tonnes and down by one-million tonnes, respectively.

“Maintaining our original copper and zinc guidance, despite completion of the Kidd mine sale on June 1, with its corresponding rest-of-year loss of about 20 000 t and about 11 000 t of zinc and copper, respectively, implies a like-for-like upgrade in the guidance mid-points for these two commodities,” Nagle points out.

He adds that the group expects to report a strong half-year Marketing adjusted earnings before interest and taxes (Ebit) of about $3.3-billion.

PRODUCTION

For the six months to June 30, Glencore’s own sourced copper production of 397 000 t was 53 100 t, or 15%, above that of the first half of 2025, reflecting various higher contributions across the portfolio, primarily owing to increased mining rates and improved grades at African Copper (55 000 t) and higher grades at Antamina (27 700 t) but partly offset by the planned closure of the Mount Isa copper mine, in Australia, in July 2025 (20 400 t).

Own sourced cobalt production of 10 200 t was, however, 8 700 t, or 46%, lower year-on-year, primarily reflecting the Democratic Republic of Congo government’s ongoing cobalt export quota regime, with operating activities requiring careful consideration of quota allocations, whereby prioritisation and focus is given to copper production.

In this context, cobalt contained in mixed ore is increasingly being held in solution, rather than processed and dried into saleable cobalt in hydroxides. This material will ultimately be processed and sold at a later date, as export regulations evolve, Glencore explains.

Further, own sourced zinc production of 365 600 t was 99 600 t, or 21%, lower year-on-year, primarily reflecting the Lady Loretta mine, in Australia, having reached the end of its mine life in late 2025 (51 000 t) and lower zinc grades at the Antamina mine (39 200 t), in Peru, in line with its current higher copper and lower zinc grade phasing.

The decrease also reflects the disposal of the Kidd mine, in Canada, on June 1.

Meanwhile, own sourced nickel production of 35 800 t was broadly in line with that of the prior comparable period, while attributable chrome ore production of 1.65-million tonnes was 70 000 t, or 4%, lower year-on-year, reflecting the operating conditions over the period.

Steelmaking coal production of 13.5-million tonnes was 2.2-million tonnes, or 14%, lower year-on-year, owing to lower output from Elk Valley Resources, in Canada, primarily reflecting lower throughput and yields, which are expected to normalise in the second half of this year, somewhat offset by higher Australian volumes.

Energy coal production of 47.4-million tonnes was 900 000 t, or 2%, lower year-on-year, primarily reflecting the impact of the voluntary production curtailment implemented at Cerrejón, in Colombia, from the second quarter of 2025 in response to market conditions.

Glencore has maintained its copper output guidance for the full-year to December 31 at between 810 000 t and 870 000 t, while the guidance for zinc remains at between 700 000 t and 740 000 t and nickel production at between 70 000 t and 80 000 t.

Steelmaking coal production for the full-year is now expected to be between 30-million and 32-million tonnes, compared with prior guidance of between 30-million and 34-million tonnes. The energy coal production guidance has also been updated to between 96-million and 101-million tonnes, compared with previous guidance of 95-million to 100-million tonnes.

ANALYSTS’ COMMENTARY

Capital markets firm Barclays Capital comments in a statement that it perceives material organic upside for Glencore from an operational recovery and brownfield growth within copper, while its exposure to thermal coal, oil and energy marketing provides additional leverage with higher-for-longer energy prices plus pricing upside from likely El Niño-induced heatwaves across Asia over the summer.

It adds that Glencore retains clear merger and acquisitions optionality, with its diversified asset base, marketing franchise and copper growth profile making it a plausible strategic target should Rio Tinto re-engage.

Further, investment bank and capital markets firm Jefferies notes that Glencore is expected to have a very strong performance in the second half of the year.

It notes that Glencore’s Marketing business is a key point of differentiation that should benefit from the ‘new normal’ of de-globalisation and elevated geopolitical risk.

In Jefferies’ recent in-depth report, the company increased its long-term Marketing Ebit forecasts to reflect the improving environment for this business.

Glencore’s preliminary reported Marketing Ebit of $3.3-billion for the first six months of this year is well above market consensus of $2.2-billion and also above Jefferies’ prior conservative estimate of $2.5-billion.

Jefferies points out that Glencore’s management has noted that Marketing Ebit is likely to normalise in the second half of the year, but Jefferies says persisting energy market dislocations are likely to benefit Glencore.

It notes that the group’s marketing earnings will likely lead to consensus earnings upgrades in the second half and be a factor supporting further upgrades thereafter.

“Glencore continues to be one of our top picks in the sector based on its commodity mix, its through-cycle cash flow potential, its valuation and its potential to benefit from large-scale industry consolidation as either an acquirer or a target,” Jefferies highlights.