13th Aug 2015 06:10
LONDON (Alliance News) - Glencore PLC Thursday said it will book a large impairment related to its assets in Chad in light of the decline in oil prices and slashed its capital expenditure budget for the rest of 2015 as it reported a mixed set of production results in the first half of 2015.
The FTSE 100-listed multi-commodity miner said in light of the sharp decline in oil prices which caused it to amend its work programme in Chad, said it will book a USD790 million impairment related to the assets, and restrict capital expenditure in the country.
As a result, Glencore said the number of drilling rigs in operation in Chad will also "significantly" reduce.
The miner also cut its capital expenditure budget for the full year. In the first half of 2015, the miner spent USD3.0 billion in industrial capital expenditure, which is now expected to total USD6.0 billion for the full year, down from its previous guidance range of USD6.50 to USD6.80 billion.
In the first half of the year, Glencore reported a 3% fall in copper production to 730,900 tonnes due to grade changes at the Alumbrera and Antamina mines and planned maintenance activities at the Collahuasi mine.
Zinc production was up 12% year-on-year to 730,300 tonnes whilst ferrochrome production was 16% higher at 756,000 tonnes.
The biggest rise was in Glencore's oil entitlement, up 68% to 5.3 million barrels in the period reflecting increased production from Badila and Mangara in Chad, and Glencore's higher ownership interest in these fields following the Caracal acquisition.
However, coal production fell 4% to 68.7 million tonnes, primarily due to the market-driven decision to cut back production.
By Joshua Warner; [email protected]; @JoshAlliance
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