6th May 2014 07:12
LONDON (Alliance News) - Glencore Xstrata PLC Tuesday said it raised production across a range of metals during its first quarter compared to the previous year but suffered a fall in zinc production year-on-year and in copper, zinc and gold production sequentially from the quarter just prior.
The mining giant said its own-source copper production increased 24% to 382,000 tonnes in the three months ended March 31, compared to the previous year, due to expansions at its Mutanda operations in the Democratic Republic of Congo and Ernest Henry site in Australia, along with improved production at its Collahuasi mine in Chile and Antamina site in Peru.
The company said its ferrochrome production increased 29% to 335,000 tonnes, but Glencore noted that a new electricity buy-back programme the company entered in the first quarter in 2013 limited production at the time. Glencore said its new Lion phase 2 smelter in South Africa started production on April 6, and its second furnace is expected to come on line at the end of its second quarter or the start of its third.
Glencore said its coal production increased 4% year-on-year to 34.1 million tonnes during the period as the company recovered from a lengthy strike at its Cerrejon site in Colombia during the first quarter 2013 and it saw productivity improvements in its Australian operations.
Furthermore, the company said its oil exploration and production increased 37% to 7.4 million barrels, due to the commencement of new production from its Alen field in Equatorial Guinea and Badila fields in Chad at the end of June and September 2013, respectively.
However, Glencore said its zinc production fell 18% to 306,000 tonnes during the period from a year before, as its Perseverance and Brunswick sites in Canada reached the end of their mine lives in June 2013. The company said that, excluding these two sites, its zinc production was broadly in line with the previous year period.
It added that quarterly production of copper, zinc and gold fell sequentially from the previous quarter by 10%, 9% and 12%, respectively, during the period, due mainly to planning mine sequencing, the processing of lower grade ore at a range of operations and ongoing power issues affecting its operations.
In March, the company announced an unexpected increase in full-year 2013 revenues, beating market expectations and leading to a rise in net profit before significant items during the period.
During 2013, Glencore increased production across the majority of its portfolio of assets in its full-year, with its total own-sourced copper production increasing 26% to 1.5 million tonnes, driven specifically by strong results from its multiple African copper sites, as well as the Collahuasi mine in Chile, Antapaccay mine in Peru, and Ernest Henry site in Australia.
Glencore also produced a new resources and reserves report in February which said that the company has increased its proved and probable net oil reserves 129% to 87 million barrels of oil equivalent.
Tuesday's announcement comes just weeks after the company sold its interests in the Las Bambas copper project in Peru to a Chinese consortium including MMG Ltd, Guoxin International Investment Corp Ltd and CITIC Metal Co Ltd for USD5.9 billion in cash.
Glencore is also currently in the process of buying African mining company Caracal Energy PLC after reaching a deal to acquire the company for 550 pence a share, or about GBP808.5 million in cash in April.
In early trading Tuesday, Glencore shares are down 0.1% at 318.85 pence.
By Tom McIvor; [email protected]; @TomMcIvor1
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