JOHANNESBURG (miningweekly.com) – Multilisted global mining and marketing company GlencoreXstrata recorded substantial first-quarter (Q1) increases in its South Africa-based ferrochrome production and Africa-centred oil output.

The London-, Hong Kong- and now also Johannesburg-listed company – headed by South African-born Ivan Glasenberg – lifted ferrochrome production by a hefty 29% to 335 000 t, and oil by an even higher 37% to 7.4-million barrels.

Ferrochrome Q1 volumes were unrestricted by Eskom’s power buy-back programme, which was in full swing in the corresponding first quarter of last year.

Going forward, ferrochrome production will be further boosted by the Lion Phase 2 ferrochrome smelter expansion, which is now a full month into production, with commissioning of the second furnace expected later this year.

On a net entitlement basis, Glencore’s gross oil production was actually up 48%, spurred by new production from the Alen oilfield, in Equatorial Guinea, and Badila in Chad.

The company is acquiring Caracal Energy, the majority owner and operator of Chad oil production and exploration fields, in which it is currently a minority partner.

Copper production rose 24% to 382 000 t, driven by the expansions at Mutanda and Ernest Henry and improved production at Collahuasi and Antamina, but zinc output fell 18% to 306 000 t, owing to the Perseverance and Brunswick mines coming to a close.

Last year’s lengthy Cerrejón strike in Colombia was a factor in keeping coal production at 34.1-million tons, an increase of 4%.

Last month the company announced an agreement to sell its Las Bambas copper project to a Chinese consortium for $5.85-billion and approval for the go-ahead of its seven-million-ton-a-year Askaf North iron-ore project in Mauritania, where first production is expected in early 2017.

It expects to close the Clermont coal transaction before the end of June.

“The slow ramp-up at Koniambo is a concern, since rising nickel prices would make higher output increasingly attractive,” said Investec in a note, referring to Glencore’s $6.3-billion Koniambo nickel asset in New Caledonia, which senior management last year described as a “problem project”.

On Monday, the Glencore board proposed a final dividend distribution of R1.16 ($0.111) a share, subject to shareholder approval on May 20, at an applicable currency exchange rate of R10.46 to the dollar.

If approved, the distribution will be paid on Friday, May 30.

A 15% dividend tax will be withheld from the R1.16 a share, leaving the net distribution at R0.98 a share.

Glencore has a total of 13 278 405 466 ordinary shares in issue.

As a non-resident, the company is not subject to the formerly applicable secondary tax on companies (STC) regime and no STC credits are thus available for offset against the dividend tax liability.

The distribution, which will be paid out of Glencore’s capital reserves, constitutes a foreign dividend as defined in Section 1 of the South African Income Tax Act.