11th Feb 2015 07:34
LONDON (Alliance News) - Glencore PLC Wednesday said it has revised down its capital expenditure budget for 2015 in response to "the volatile market backdrop" and said production rose across the board during 2014, as it announced it will divest its stake in Lonmin PLC in the first half of 2015.
In December, the mining and oil company had laid out a USD7.9 billion capital expenditure budget for 2015, which has now been revised down to between USD6.5 billion and USD6.8 billion.
Glencore said it will divest from its 23.9% stake in platinum miner Lonmin during the first half of 2015 by distributing Lonmin shares to Glencore shareholders. Glencore acquired the stake in Lonmin through its acquisition of Xstrata PLC in May 2013.
"It is currently proposed that the divestment in Lonmin will be implemented by way of a distribution in specie to Glencore shareholders. This distribution, currently representing 3 cents per Glencore share, will not impact Glencore's approach towards its annual cash distribution consideration," said the company.
Lonmin responded with its own statement, saying: "Glencore's proposal is a constructive way forward which would enable Glencore shareholders to continue their participation in Lonmin's future."
Glencore's own-sourced copper production for 2014 totalled 1.5 million tonnes, up 4% from 2013 and mainly driven by a ramp-up at the Mutanda mine in the Democratic Republic of Congo.
Own-sourced nickel production was up 3% year on year to 101,000 tonnes after increased production at the Koniambo mine and increased grades at the Raglan mine in Canada.
Own-sourced ferrochrome production rose by 5% from 2013 to 1.3 million tonnes, reflecting the ramp-up at the Lion phase 2 project in South Africa, which is expected to reach full capacity by the middle of 2015, Glencore said.
Own-sourced coal production totalled 146.3 million tonnes, up 6% from 2013 after a series of productivity improvements across its coal portfolio in Australia. Glencore said it did shutdown its Australian coal operation in December 2014 and January 2015 "in response to the subdued market environment," it said.
Own-sourced nickel production was the only commodity not to experience an increase during 2014, remaining flat from a year earlier at 1.4 million tonnes. However, nickel production was up 12% quarter on quarter.
Glencore's oil entitlement rose year on year by 47% to 7.4 million barrels in 2014, caused by the Alen and Badila assets recording their first full year of production and the company increasing its stake in its assets in Chad following the Caracal acquisition.
By Joshua Warner; [email protected]; @JoshAlliance
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