REG - Glencore PLC - Full Year 2023 Production Report

GlencoreAnnouncement

01/02/2024 07:00

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RNS Number : 6121B  Glencore PLC  01 February 2024

NEWS RELEASE

Baar, 1 February 2024

Full Year 2023 Production Report

 

 

Glencore Chief Executive Officer, Gary Nagle:

"Overall 2023 production was in line with our earlier revised guidance, with
stronger second half volumes delivered across our key commodities, including
copper, zinc, nickel and coal. Compared to 2022, the moderately lower
year-on-year copper and zinc department managed production volumes, primarily
reflect disposals of the Cobar copper mine and various South American zinc
operations. Nickel volumes fell 9%, owing to higher third-party production at
INO and Murrin Murrin maintenance. Coal production was 3% higher, noting the
numerous capacity constraints (weather, blockades and logistics) that impacted
the base period.

"In this production update, we also provide updated guidance for 2024. Copper
in the 950-1,010kt range, reflects the sale of Cobar, as well as cobalt
market-related adjustments to operating rates at Mutanda vs previous guidance
from our December 2022 Investor Update. Zinc guidance is positioned within a
similar range at 900-950kt, while nickel production guidance is 80-90kt,
excluding Koniambo (KNS). Coal production is forecast to be steady at the
guidance range mid-point of 110Mt, excluding any incremental volumes from the
recently announced acquisition of a 77% interest in Teck's steelmaking coal
business, currently going through its various approval processes.

"We furthermore expect to report a FY 2023 Marketing Adjusted EBIT result of
approximately $3.5 billion, largely repeating H1's run-rate."

 

Production from own sources - Total(1)

( )

                                     2023                  2022                  Change %
 Copper                 kt                1,010.1               1,058.1                    (5 )
 Cobalt                 kt                   41.3                  43.8                    (6)
 Zinc                   kt                  918.5                 938.5                    (2)
 Lead                   kt                  182.7                 191.6                    (5)
 Nickel                 kt                   97.6                 107.5                    (9)
 Gold                  koz                    747                   661                    13
 Silver                koz                 20,011                23,750                   (16)
 Ferrochrome            kt                  1,162                 1,488                   (22)
 Coal                   mt                  113.6                 110.0                     3

1  Controlled industrial assets and joint ventures only. Production is on a
100% basis, except as stated.

 

 

Production guidance

                                       Actual                   Actual           Actual                 Guidance

FY
         FY
FY
FY
                                       2021                2022                  2023                   2024
 Copper                kt                    1,196               1,058                 1,010              950-1,010
 Cobalt                kt                     31.3                43.8                  41.3                  35-40
 Zinc                  kt                    1,118                 939                   919                900-950           (1)
 Nickel                kt                      102                 108                    98                  80-90           (2)
 Ferrochrome           kt                    1,468               1,488                 1,162                 1,100-1,200
 Coal                  mt                      103                 110                   114                105-115           (3)

1 Excludes Volcan.

2 In relation to KNS, we announced in September 2023 that Glencore would not
continue to fund ongoing operations from March 2024 and, given such
uncertainty, 2024's nickel production guidance above is presented ex-KNS.

3 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.

 

Realised prices

         Realised                                  LME (average 12 months)    Difference

$/t
           %
         ¢/lb                  $/t
 Copper           367                 8,091               8,485                       (5)
 Zinc             116                 2,564               2,650                       (3)
 Nickel           851                18,761              21,487                      (13)

The average Newcastle coal (NEWC) settlement price for 2023 was $173/t. After
applying a portfolio mix adjustment (component of our regular coal cash flow
modelling guidance) of $32/t to reflect e.g. movements in the pricing of
non-NEWC quality coals, coking coal margins and effect of JPU fixed-price
contracts, an average thermal-equivalent realised price of c. $141/t can be
applied across all coal sales volumes.

 

Production highlights

•       Own sourced copper production of 1,010,100 tonnes was 48,000
tonnes (5%) lower than 2022, primarily reflecting the sale of Cobar in June
2023 and lower copper by-product production outside the Copper department. Own
sourced copper sales during the period were some 13,000 tonnes lower than net
relevant production, due to the timing of shipments.

•      Own sourced cobalt production of 41,300 tonnes was 2,500 tonnes
(6%) lower than 2022, mainly due to feed plan adjustments at Mutanda, in the
context of an oversupplied market.

•       Own sourced zinc production of 918,500 tonnes was 20,000
tonnes (2%) lower than 2022, mainly reflecting the 2022 disposals of South
American zinc operations (27,300 tonnes) and the closure of Matagami (17,300
tonnes), offset by stronger production from Kazzinc (Zhairem) and Antamina.

•       Own sourced nickel production of 97,600 tonnes was 9,900
tonnes (9%) lower than 2022, primarily reflecting higher INO third party
production (versus own sourced) and a planned shutdown of Murrin Murrin for
routine maintenance, somewhat offset by a more consistent production
performance from Koniambo.

•       Attributable ferrochrome production of 1,162,000 tonnes was
326,000 tonnes (22%) lower than 2022, mainly due to planned additional smelter
downtime during the 3-month high electricity demand winter season, a period of
elevated power prices. Q4 2023 production was 133,000 tonnes (85%) higher than
Q3 2023, as the smelter portfolio progressively restarted, albeit with the
Rustenburg smelter remaining idle, pending an improved price/cost environment.

•       Coal production of 113.6 million tonnes was 3.6 million tonnes
(3%) higher than 2022, reflecting higher productivity in South Africa and a
year over year easing in certain external factors that constrain capacity,
such as wet weather and blockades.

 

Unit cost guidance

•       Aggregate thermal coal unit cost for FY 2023 is expected to be
reported moderately below the previous guidance provided alongside our 2023
Half-Year results, primarily reflecting lower royalties. We expect to report
higher copper, zinc and nickel FY 2023 unit costs than previous guidance,
reflecting increased inflation across key operating regions, as well as the
impact of cobalt stockpiling and related non-cash inventory adjustments within
copper, a fixed cost volume variance impact for zinc and higher third-party
feed production in nickel.

 

Other matters

•       The Group's mineral resources and ore reserves report for 2023
has been published today on our website.

To view the full report please click here:
https://www.glencore.com/.rest/api/v1/documents/static/f2f3f568-9437-4c55-bcb6-49d2fc96d305/GLEN_2023-FY_ProductionReport.pdf
(https://www.glencore.com/.rest/api/v1/documents/static/f2f3f568-9437-4c55-bcb6-49d2fc96d305/GLEN_2023-FY_ProductionReport.pdf)

 

For further information please contact:

 Investors
 Martin Fewings        t: +41 41 709 2880      m: +41 79 737 5642      martin.fewings@glencore.com
 Media
 Charles Watenphul     t: +41 41 709 2462      m: +41 79 904 3320      charles.watenphul@glencore.com

www.glencore.com (http://www.glencore.com)

 

Glencore LEI: 2138002658CPO9NBH955

Please refer to the end of this document for disclaimers including on
forward-looking statements.

Notes for Editors

Glencore is one of the world's largest global diversified natural resource
companies and a major producer and marketer of more than 60 commodities that
advance everyday life. Through a network of assets, customers and suppliers
that spans the globe, we produce, process, recycle, source, market and
distribute the commodities that support decarbonisation while meeting the
energy needs of today.

With around 140,000 employees and contractors and a strong footprint in over
35 countries in both established and emerging regions for natural resources,
our marketing and industrial activities are supported by a global network of
more than 40 offices.

Glencore's customers are industrial consumers, such as those in the
automotive, steel, power generation, battery manufacturing and oil sectors. We
also provide financing, logistics and other services to producers and
consumers of commodities.

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Human Rights and the International Council on Mining and Metals. We are an
active participant in the Extractive Industries Transparency Initiative.

We recognise our responsibility to contribute to the global effort to achieve
the goals of the Paris Agreement by decarbonising our own operational
footprint. We believe that we should take a holistic approach and have
considered our commitment through the lens of our global industrial emissions.
Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3
industrial emissions by 15% by the end of 2026, 50% by the end of 2035 and we
have an ambition to achieve net zero industrial emissions by the end of 2050.
For more detail see our 2022 Climate Report on the publication page of our
website at glencore.com/publications.

Important notice concerning this document including forward looking statements

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