Glencore to launch African turnaround programme after disappointing performance

Glencore on Wednesday said it plans to tackle issues at its African copper business after its performance failed to meet expectations, while the company also flagged a $350m hit on its cobalt business.

Overall, copper production for the six month period ended 30 June fell 5% below that for the same period last year, while cobalt output rose 28%, Zinc and coal output rose 8% and 10% respectively and nickel dropped 11% due to maintenance.

The British–Swiss commodity trading and mining company said the drop in copper production was due to factors including alumbrera open-cut depletion and sale of Punitaqui in the second half of last year, re-bricking at Kazzinc's furnace and smelter outages at Mopani culminating in the shutdown of the plant in June, with a major refurbishment programme now underway.

Ivan Glasenberg, chief executive of Glencore, said: "I am pleased to report a solid performance from our underlying base business, where our key assets in copper, coal, zinc and nickel performed largely in line with our expectations. However, our African copper business did not meet expected operational performance. We have moved to address the challenges at Katanga with several management changes as well as overseeing a detailed operational review, targeting multiple improvements to achieve consistent, cost-efficient production at design capacity."

Glasenberg added that a more comprehensive overview of the turnaround plans would be released by the FTSE 100 listed company along with its financial results next week.

Meanwhile, the increase in Cobalt production came after exports resumed at the Kamoto Project in Congo in April, which had been suspended because of higher than permitted uranium content, though this coincided with cobalt prices halving from above $60,000 per tonne in late 2018 to below $30,000.

This leaves the mining giant facing a mark-to-market loss on roughly 10,000 tonnes of cobalt its marketing business bought from its mining business but has not yet sold, leading to a $350m earnings before interest and tax cobalt loss.

Glencore's shares were down 1.92% at 267.75p at 1314 BST.