Glencore lifts earnings guidance on third quarter production

Glencore issued its third quarter production numbers on Monday, reporting own sourced copper production of 946,500 tonnes, which was 11% lower than the comparable 2016 period.

The FTSE 100 company said that reflected the Ernest Henry minority sale in the fourth quarter of 2016, combined with smelter maintenance at Mount Isa in the third quarter, reduced throughput at Mutanda - due to power interruption at Mopani, which impacted the supply of sulphuric acid - end of mine-life production declines at Alumbrera and the timing of lower copper grades at Antapaccay.

Own sourced zinc production of 827,400 tonnes was 5% up on the comparable period, which mainly reflected the transition to higher zinc grade (versus copper) areas at Antamina.

Glencore said own sourced nickel production of 80,700 tonnes was down 2% on the comparable period, which reflected maintenance at INO and Murrin and a higher proportion of third party feeds in INO's metallurgical mix.

Attributable ferrochrome production was 1,107,000 tonnes, which the board said was “in line” with the comparable period.

Coal production of 91 million tonnes was in line with the comparable period, as expected increases from productivity improvements and Glencore's higher equity share in certain mines were said to be offset by the impacts of industrial action in New South Wales and unusually heavy rainfall in Colombia.

Glencore's oil entitlement production interest of 3.9 million barrels was 36% below the comparable 2016 period, reflecting natural field declines, having only recommenced drilling in Chad in the second half of 2017.

The trend in Chad was expected to improve as the results from the single-rig drilling campaign started to be realised.

Glencore's board said its full year 2017 marketing EBIT guidance was being increased to between $2.6bn and $2.8bn, which reflected a “strong” third quarter performance.

It was previously between $2.4bn and $2.7bn.