Glencore says it will “advance options” regarding its non-core operations

GLENCORE CEO, Ivan Glasenberg, said the company was “advancing options” regarding non-core operations within the group after unveiling in January the proposed sale of its shares in Mopani Copper Mines, the Zambian company.

Glasenberg was commenting in the group’s fourth quarter production report today which provided few surprises in the wake of last year’s investor update.

Copper production was 8% lower year-on-year at 1.26 million tons (Mt) owing to the mothballing last year of the firm’s Mutanda assets in the Democratic Republic of Congo. Own sourced cobalt production was 41% lower than in 2019.

There were also year-on-year declines for the firm’s coal production, down 24% to 106.2Mt, owing to the impact of the Covid-19 pandemic in Colombia and South Africa. Stoppages in South Africa were also behind a 28% decline in ferrochrome to 1.03Mt.

Ferrochrome production has been guided to about 1.4Mt for this year following the restart of smelter facilities in South Africa which were fully operational in the fourth quarter except for Lydenburg. The Lydenberg facility remains on extended care and maintenance.

“Overall, we see the results as broadly in line with our expectations,” said Goldman Sachs in a report on the numbers today.

Glencore announced on January 19 it would sell its 90% stake in Mopani to the Zambian government in terms of which it will offload $1.5bn in debt held within Mopani’s structure as well as own exclusive rights to copper offtake from the mine until the debt is repaid.

Glasenberg said in December’s investor update that the company would be potentially prepared to sell its coal assets, which produced just over 106Mt in 2020, in the event that anchor shareholders considered divesting from the company. The coal assets are considered core by the group.

Analysts have questioned whether Glencore’s in-coming CEO, Gary Nagle, would eventually be put at a crossroads with the coal assets. Rival companies such as Rio Tinto and BHP have largely quit thermal coal production whilst Anglo American has proposed the ‘spinning out’ of its South African thermal coal assets, possibly as early as this year.

Glasenberg, who announced he would step down from Glencore by mid-year, said the group kept an open mind on its coal assets whilst working towards its goal of net carbon neutrality by 2050 – a fresh target outlined at its investor update.

Glencore announced on Tuesday that the former Anglo American CEO, and Vedanta Resources executive, Cynthia Carroll, would become the company’s third female non-executive director.