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Glencore’s Copper Production Gains 24% After Expansions

By Jesse Riseborough
May 06, 2014 12:41 PM EDT 2 Comments
Chief Executive Officer Ivan Glasenberg, the second biggest shareholder in the company, is boosting production and adding mines at a time when his peers are selling operations.
Photographer: Simon Dawson/Bloomberg
Chief Executive Officer Ivan Glasenberg, the second biggest shareholder in the company, is boosting production and adding mines at a time when his peers are selling operations.

Glencore Xstrata Plc (GLEN), the mining and trading company created in a $29 billion deal last year, increased copper production by 24 percent in the first quarter after expansions in Africa and Australia.

Output from its own mines was 382,000 metric tons in the three months ended March 31, up from 307,700 tons a year earlier, Baar, Switzerland-based Glencore said today in a statement. Coal output rose 4 percent to 34.1 million tons, lower than expected, after a strike at a mine in Colombia.

Glencore is the biggest exporter of power-station coal. Copper and coal sales are the largest contributors to profit. The largest publicly traded commodity supplier said its trading business performed strongly, “in line with our expectations.”

Production of copper missed Sanford C. Bernstein’s estimate by 9 percent and coal output was 5 percent lower than forecast, analyst Paul Gait said today in a note to clients. Still, “Glencore’s African copper assets remain its strongest source of high quality revenue growth going forward,” Gait said.

Full-year output from the Koniambo nickel project, that the company estimated in September cost $6.3 billion, will be reviewed, Glencore said today. Output of 1,000 tons of nickel in the quarter was below expectation because of factors including power and a maintenance stoppage in March, the company said.

Chief Executive Officer Ivan Glasenberg, the second-biggest shareholder, is boosting production and adding mines at a time when his peers are selling operations. Glencore has interests in more than 35 coal mines in Colombia, Africa and Australia, accounting for about 10 percent of global seaborne supply.

Zinc production dropped 18 percent to 306,000 tons, lead output was little changed at 79,000 tons and nickel fell 15 percent to 22,300 tons.

Glencore advanced 0.5 percent to close at 320.75 pence in London. The stock has risen 2.6 percent this year, giving the company a market value of 42.6 billion pounds ($72 billion).

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore.

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net

To contact the editors responsible for this story: John Viljoen at jviljoen@bloomberg.net Tony Barrett, Alex Devine

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