Glencore cuts production guidance as Q1 copper output falls

Glencore cut its production guidance on Thursday as it posted a decline in first-quarter copper output.

Copper production during the quarter fell 9% from the same period a year ago to 293,300 tonnes, while zinc output was up 13% at 295,600 tonnes and nickel production was 4% higher at 28,200 tonnes.

Coal output in the first quarter was down 4% at 31.9 million tonnes, mainly reflecting operating challenges in South Africa and mining sequencing in the Australian coking portfolio, partly offset by higher Australian thermal coal production.

The miner said 2020 copper production is now expected to come in at around 1.26 million tons, down from 1.3 million tons previously, while cobalt output is expected to be 28,000 tons, down from 29,000.

The company also said it will cut capex this year to between $4bn and $4.5bn, from $5.5bn.

Chief executive officer Ivan Glasenberg said that to date, disruptions to Glencore’s business from the coronavirus pandemic have been "manageable" and the majority of its assets are operating "relatively normally".

"Some industrial assets have been temporarily suspended, generally in line with national and regional lockdowns. Our updated full year production guidance reflects these impacts," he said.

"A rigorous focus on optimising our asset portfolio has helped to preserve solid levels of overall Industrial Asset free cash flow generation in the current operating environment. Focused cost control, lower energy costs, favourable movements in producer currencies and higher precious metals' by-product credits, have underpinned reductions in forecast full year unit cash costs for our key commodity departments."