REPORT: Glencore Increases Copper, Coal Production in First Half
The world’s largest commodity trader Glencore (LSE:GLEN) recorded a 13 percent increase in copper output to 741,000 tons, in line with market forecasts.
Coal for the London-listed company also rose in output, increasing five percent to 71.2 million tons thanks in part to the expansion at its Australian mines.
The two metals and minerals have been Glencore’s most profitable assets so far in 2014.
"Second-quarter production was broadly in line with our forecasts. The production profile for the group is weighted towards the second half and we therefore expect volume improvements going forward," Citi analysts said.
Copper output improved primarily by growth at it African and South American mines, including its Mutanda and Katanga mines in the Democratic Republic of Congo and at its Antapaccay mine in Peru. Almost half of the company’s profits come from the red metal.
While copper and coal have performed well for Glencore, output for zinc and nickel has not.
Zinc dropped 11 percent to 650,400 tons in the first-half and nickel production fell eight percent to 49,100 tons.
The dip in nickel production can be contributed to the closure of mines in Australia and the Dominican Republic.
The company’s Koniambo mine in New Caledonia, a multi-billion Greenfield project, produced 4,100 tons of nickel in ferronickel in the first half reporting.
The previous goal for Koniambo was 55,000 tons by 2016. Glencore plans to announce a revised target number for the mine next week.
"The ramp up of Koniambo is still likely to take longer than expected, and could be an incremental downside risk," Nomura analysts said in a note.
Shares for Glencore were down 1.2 percent yesterday, in line with a one percent fall in the UK-listed mining sector.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.