Glencore: Full year production guidance remains unchanged
Glencore in its First Quarter Production Report 2024 reports that full year production guidance remains unchanged from that presented at the beginning of the year. First quarter copper, zinc and coal production was broadly in line with the prior year comparable period, while nickel increased 14%, reflecting recovery from the Raglan strike impacts in the base period. Lower year-on-year cobalt and ferrochrome volumes primarily reflect the previously announced market-related production adjustments in the DRC and the decision to idle our Rustenburg ferrochrome smelter in the current price environment.
Glencore Chief Executive Officer, Gary Nagle says “Basis Marketing’s performance over the first quarter, we currently expect full year Marketing Adjusted EBIT in the $3.0-$3.5 billion range, being around the top end of our long-term $2.2-3.2 billion p.a. guidance range, reflecting cyclically elevated interest rates.”
Q1 PRODUCTION HIGHLIGHTS
Own sourced copper production of 239,700 tonnes was 2% above Q1 2023 on a like-for-like basis, removing 8,700 tonnes of Cobar (sold in June 2023) volumes from the prior period.
Own sourced cobalt production of 6,600 tonnes was 3,900 tonnes lower than Q1 2023, mainly reflecting planned lower run-rates at Mutanda in the current weak cobalt pricing environment and mill downtime at KCC.
Own sourced overall zinc production of 205,600 tonnes was in line with Q1 2023, reflecting the ramp up of Zhairem (14,300 tonnes), offset by lower zinc tonnes from Antamina (10,300 tonnes), on account of its expected mining sequence and zinc Australia (3,500 tonnes), due to a tropical cyclone and flash flooding. Own sourced zinc production from the zinc department itself, excluding Antamina, was 10,600 tonnes (6%) higher than Q1 2023.
Own sourced nickel production of 23,800 tonnes was 2,900 tonnes (14%) higher than Q1 2023, largely due to recovery from the INO supply chain constraints seen in the base period.
Attributable ferrochrome production of 297,000 tonnes was 103,000 tonnes (26%) below Q1 2023, as the Rustenburg smelter remains idled, pending an improved price/cost environment. Coal production of 26.6 million tonnes was broadly in line with Q1 2023.
Koniambo (KNS) transitioned to care and maintenance during February 2024. The nickel production guidance above (consistent with our earlier guidance release) is presented ex-KNS and therefore excludes the 5.0kt produced by KNS in Q1 2024 prior to its transition to care and maintenance.
Guidance excludes any contribution from the Elk Valley Resources (EVR) steelmaking coal assets, in which Glencore agreed in November 2023 to acquire a 77% interest from Teck Resources Limited, subject to various regulatory approvals. Production guidance is unchanged from that announced in our full year 2023 Production Report released on 1 February 2024.
