Glencore Plc has announced a decline in profits for its copper and cobalt project. This is following a released statement that its trading profit will be at the top end of its target this year. Â The company had reportedly nearly US $1Bn in earnings before interest and taxes in oil trading in the first six months of 2020, similar to what it made in the full year 2019.
In March and April, as oil prices plunged, traders were able to buy and store huge amounts of cheap crude before selling it later at higher prices. Glencore has set lower full-year guidance for the production of nickel and coal. Guidance for copper, cobalt, zinc and ferrochrome remained unchanged.
According to Glencore CEO Ivan Glasenberg, the firm’s marketing business has risen to the challenge, delivering robust counter-cyclical earnings. He further added that avery strong first-half performance allows Glencore to now raise our full year 2020 EBIT expectations to the top end of our US $2.2-$3.2Bn guidance range.
Glasenberg said the company saw particularly strong operational performance at Katanga, with its ramp-up on track to achieve design capacity by the end of the year. Cobalt production was down 33% to 14,300 tonnes, but the company retained full year guidance for the metal, at a midrange of 28,000 tonnes.
Glencore’s zinc production was 550,100 tonnes, in line with H1 2019, reflecting stronger grades at the Canadian mines and the various temporary covid-19 related suspensions at Antamina and other South American operations.
Nickel production of 55,200 tonnes was in line with H1 2019, reflecting a strong period of operations at Murrin mine in Western Australia. Coal production of 58.1 million tonnes was 10.1 million tonnes (15%) lower than H1 2019, mainly reflecting the covid-19 related asset suspensions in Colombia.
Covid-19
While the majority of Glencore’s assets continued to operate through Q2 with minimal disruption, certain operations were temporarily suspended.
The company said it expects to make up the majority of lost tonnes at its Raglan nickel mine in Quebec over the balance of 2020. At Matagami zinc mine, production restarted in April and it is in line with historical levels, according to the miner.
