GLENCORE looks set to keep the good times rolling for mining investors saying in a second quarter and interim production report today that its marketing division was heading for the top end of its annual earnings guidance.
The division was expected to generate $2.2bn and $3.2bn in earnings for the year, according to a report by Reuters. The group, headquartered in Switzerland, also lowered full-year guidance for nickel and coal, citing output disruptions.
Bumper dividends have been announced this month by Rio Tinto and Anglo American, the latter paying out $4.1bn to shareholders following record interim earnings. Mining companies are benefiting from stand-out pricing for commodities such as iron ore, platinum group metals, and copper.
Glencore doesn’t produce PGMs or iron ore but it strategically owns major, high grade copper, and cobalt resources while its position in coal is likely to be of benefit given the improvement in the fuel’s price as 2021 has progressed.
From a production perspective, Glencore said coal fell 16% to 48.7 million tons (Mt) in the first half, partly because of market-related cuts in Australia that started in the second half of 2020, and reduced exports from South Africa.
Lead output fell by 9% to 117,000 tons and nickel was down 14% to 47,700 tons over the period, according to the report by Reuters. In the first half, zinc production rose by 6% to 581,800 tons, as Covid-19-related suspensions started to be lifted, but Glencore said the second half could be slower than previously thought.
Copper production rose by a modest 2% to 598,000 tons and battery material cobalt by 3% to 14,800 tons in the first half.
Oil output of 2.56 million barrels of oil equivalent was down 2% from the same year-ago period, as care and maintenance at its Chad oilfields were offset by output at its Equatorial Guinea project.
Glencore is due to report its interim financial results on August 5 which will also be the first time the market gets a look at Gary Nagle as CEO of the company. He succeeded Ivan Glasenberg who ran the group for 18 years, listing it in London in 2011.