5th May 2015 10:18
LONDON (Alliance News) - Glencore PLC Tuesday said production grew year-on-year across all of its commodities in the first quarter of 2015 apart from lead, but some segments saw production fall from the previous quarter as the company experienced weaker commodity prices overall.
The FTSE 100 natural resources company said own-sourced zinc production was up 16% year-on-year to 356,200 tonnes, driven by the expansions at Lady Loretta and McArthur River mines in Australia. However, some temporary downtime at McArthur River and lower grades at the Kazzinc mine in Kazakhstan, Matagami in Canada and Rosh Pinah in Namibia resulted in production falling by 8% quarter-on-quarter.
However, total own sourced lead production fell by 4% quarter on quarter to 75,800 tonnes due to decision to prioritise zinc production in the areas being mined at Mount Isa and unexpected maintenance at the Kazzinc lead smelter.
Own-sourced nickel production rose 7% from a year earlier to 23,800 tonnes after production increased at the Koniambo mine in New Caledonia, but production also suffered quarter-on-quarter, falling 8%, due to "production issues" at Koniambo in the period, Glencore said.
Glencore's oil entitlement was up 52% from a year ago to 2.6 million barrels reflecting the ramp-up at Badila and Mangara and the impact of higher ownership of the Chad assets following the Caracal acquisition in July 2014.
Own-sourced copper production was the only segment to experience a year-on-year fall in the first quarter, dropping 9% to 350,700 tonnes to grade driven reductions at the Argentina-based Alumbrera and Peru-based Antamina mines due to mine sequencing and a planned maintenance shut-down at Collahuasi in Chile. Production was also down quarter on quarter by 12% due to "mining restrictions" at the Mopani mine in Zambia and the Katanga mine in the Democratic Republic of Congo.
However, overall copper-equivalent production was up 7% from a year earlier and flat from the previous quarter.
Attributable ferrochrome production was up 15% to 385,000 tonnes as the expansion at the Lion 2 project in South Africa takes effect, which started production in April 2014. The Lion 2 expansion is expected to be fully ramped-up by the middle of 2015.
Coal production rose by 4% year on year to 35.6 million tonnes due to higher production from South Africa where two new projects came into production.
Platinum group metal production was down 5% year on year to 35,000 ounces because of poor ground conditions at the Eland mine in South Africa as a result of working through a fault which impacted production. Vanadium production was flat from a year earlier at 5.3 million pounds whilst manganese production rose by 13% to 63,000 tonnes after production was ramped up due to increase demand.
In terms of commodity prices in the quarter, most segments experienced falls year on year apart from zinc, which rose 3% and aluminium and alumina prices which rose by 5% each. Australian domestic thermal coal also experienced a 10% lift in prices in the quarter.
The biggest fallers in terms of pricing was Brent crude oil, which was down 49% from a year earlier and Platts 62% CFR North China iron ore which fell by 48%.
Glencore shares were down 1.3% to 308.60 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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